Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information Use the following information for the Exercises below. (Static) [The following information applies to the questions displayed below.] Simon Company's year-end balance

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Required information Use the following information for the Exercises below. (Static) [The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Current Year 1 Year Ago 2 Years Ago $ 31,800 89,500 112,500 $ 35,625 10,700 278,500 $ 523,000 98,500 $ 129,900 Long-term notes payable Common stock, $10 par value Total liabilities and equity Retained earnings 62,500 82,500 9,375 255,000 $ 445,000 $ 75,250 101,500 163,500 104,750 163,500 131,100 $ 523,000 $ 445,000 For both the current year and one year ago, compute the following ratios: $ 37,800 50,200 54,000 5,000 230,500 $ 377,500 $ 51,250 83,500 163,500 79,250 $ 377,500 Exercise 13-8 (Static) Analyzing and interpreting liquidity LO P3 The company's income statements for the current year and one year ago follow. Assume that all sales are on credit: For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income tax expense Total costs and expenses Net income Current Year 1 Year Ago $ 673,500 $ 532,000 $ 345,500 $ 411,225 209,550 12,100 9,525 134,980 13,300 8,845 642,400 502,625 $ 29,375 $ 31,100 Earnings per share (1-a) Compute days' sales uncollected. $ 1.90 (1-b) Determine if days' sales uncollected improved or worsened in the current year. (2-a) Compute accounts receivable turnover. $ 1.80 (2-b) Determine if accounts receivable turnover ratio improved or worsened in the current year. (3-a) Compute inventory turnover. (3-b) Determine if inventory turnover ratio improved or worsened in the current year. (4-a) Compute days' sales in inventory. (4-b) For each ratio, determine if days' sales in inventory improved or worsened in the current year. Compute accounts receivable turnover. Numerator: Accounts receivable Current Year: Accounts Receivable Turnover I / Accounts receivable 1 1 Year Ago: Denominator: = Accounts Receivable Turnover = Accounts receivable turnover = 0 times 1 0 times < Required 1B Required 2B > Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2A Required 2B Required 3A Required 3B Required 4A Required 4B Compute inventory turnover. Current Year: 1 Year Ago: Inventory Turnover Numerator: Denominator: = Inventory Turnover = Inventory turnover = 0 times = < Required 2B Required 3B > 0 times Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2A Required 2B Required 3A Required 3B Required 4A Required 4B Compute days' sales in inventory. Current Year: 1 Year Ago: Days' Sales In Inventory Numerator: Denominator: X Days = Days' Sales In Inventory X = Days' sales in inventory X = 0 days = 0 days < Required 3B Required 4B >

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting Tools for business decision making

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

5th edition

470506954, 471345881, 978-0470506950, 9780471345886, 978-0470477144

More Books

Students also viewed these Accounting questions

Question

What are the skills of management ?

Answered: 1 week ago