Simon Company’s year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 30,328 $ 35,451 $ 36,196 Accounts receivable, net 89,000 62,300 51,200 Merchandise inventory 113,500 83,500 56,000 Prepaid expenses 9,767 9,306 4,022 Plant assets, net 266,348 248,187 214,582 Total assets $ 508,943 $ 438,744 $ 362,000 Liabilities and Equity Accounts payable $ 127,994 $ 74,889 $ 48,262 Long-term notes payable secured by mortgages on plant assets 96,638 101,920 80,802 Common stock, $10 par value 162,500 162,500 162,500 Retained earnings 121,811 99,435 70,436 Total liabilities and equity $ 508,943 $ 438,744 $ 362,000 The company’s income statements for the Current Year and 1 Year Ago, follow. Assume that all sales are on credit: For Year Ended December 31 Current Yr 1 Yr Ago Sales $ 661,626 $ 522,105 Cost of goods sold $ 403,592 $ 339,368 Other operating expenses 205,104 132,093 Interest expense 11,248 12,008 Income tax expense 8,601 7,832 Total costs and expenses 628,545 491,301 Net income $ 33,081 $ 30,804 Earnings per share $ 2.04 $ 1.90 (4-a) Compute days' sales in inventory. (4-b) For each ratio, determine if it improved or worsened in the current year. Compute days' sales in inventory. Days’ Sales In Inventory Choose Numerator: / Choose Denominator: x Days = Days’ Sales In Inventory / x = Days’ sales in inventory Current Yr: / x = days 1 Yr Ago: / x = days
Simon Company’s year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 30,328 $ 35,451 $ 36,196 Accounts receivable, net 89,000 62,300 51,200 Merchandise inventory 113,500 83,500 56,000 Prepaid expenses 9,767 9,306 4,022 Plant assets, net 266,348 248,187 214,582 Total assets $ 508,943 $ 438,744 $ 362,000 Liabilities and Equity Accounts payable $ 127,994 $ 74,889 $ 48,262 Long-term notes payable secured by mortgages on plant assets 96,638 101,920 80,802 Common stock, $10 par value 162,500 162,500 162,500 Retained earnings 121,811 99,435 70,436 Total liabilities and equity $ 508,943 $ 438,744 $ 362,000 The company’s income statements for the Current Year and 1 Year Ago, follow. Assume that all sales are on credit: For Year Ended December 31 Current Yr 1 Yr Ago Sales $ 661,626 $ 522,105 Cost of goods sold $ 403,592 $ 339,368 Other operating expenses 205,104 132,093 Interest expense 11,248 12,008 Income tax expense 8,601 7,832 Total costs and expenses 628,545 491,301 Net income $ 33,081 $ 30,804 Earnings per share $ 2.04 $ 1.90 (4-a) Compute days' sales in inventory. (4-b) For each ratio, determine if it improved or worsened in the current year. Compute days' sales in inventory. Days’ Sales In Inventory Choose Numerator: / Choose Denominator: x Days = Days’ Sales In Inventory / x = Days’ sales in inventory Current Yr: / x = days 1 Yr Ago: / x = days
Financial Accounting Intro Concepts Meth/Uses
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Chapter3: The Basics Of Record Keeping And Financial Statement Preparation: Income Statement
Section: Chapter Questions
Problem 34P
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Simon Company’s year-end balance sheets follow.
At December 31 | Current Yr | 1 Yr Ago | 2 Yrs Ago | ||||||||
Assets | |||||||||||
Cash | $ | 30,328 | $ | 35,451 | $ | 36,196 | |||||
89,000 | 62,300 | 51,200 | |||||||||
Merchandise inventory | 113,500 | 83,500 | 56,000 | ||||||||
Prepaid expenses | 9,767 | 9,306 | 4,022 | ||||||||
Plant assets, net | 266,348 | 248,187 | 214,582 | ||||||||
Total assets | $ | 508,943 | $ | 438,744 | $ | 362,000 | |||||
Liabilities and Equity | |||||||||||
Accounts payable | $ | 127,994 | $ | 74,889 | $ | 48,262 | |||||
Long-term notes payable secured by mortgages on plant assets |
96,638 | 101,920 | 80,802 | ||||||||
Common stock, $10 par value | 162,500 | 162,500 | 162,500 | ||||||||
121,811 | 99,435 | 70,436 | |||||||||
Total liabilities and equity | $ | 508,943 | $ | 438,744 | $ | 362,000 | |||||
The company’s income statements for the Current Year and 1 Year Ago, follow. Assume that all sales are on credit:
For Year Ended December 31 | Current Yr | 1 Yr Ago | ||||||||||
Sales | $ | 661,626 | $ | 522,105 | ||||||||
Cost of goods sold | $ | 403,592 | $ | 339,368 | ||||||||
Other operating expenses | 205,104 | 132,093 | ||||||||||
Interest expense | 11,248 | 12,008 | ||||||||||
Income tax expense | 8,601 | 7,832 | ||||||||||
Total costs and expenses | 628,545 | 491,301 | ||||||||||
Net income | $ | 33,081 | $ | 30,804 | ||||||||
Earnings per share | $ | 2.04 | $ | 1.90 | ||||||||
(4-a) Compute days' sales in inventory.
(4-b) For each ratio, determine if it improved or worsened in the current year.
Compute days' sales in inventory.
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