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Simon Companys year-end balance sheets follow.
At December 31 | 2017 | 2016 | 2015 |
Assets | | | | | | | | | |
Cash | $ | 27,904 | | $ | 32,617 | | $ | 34,676 | |
Accounts receivable, net | | 89,700 | | | 62,600 | | | 59,700 | |
Merchandise inventory | | 113,000 | | | 83,000 | | | 54,000 | |
Prepaid expenses | | 8,986 | | | 8,562 | | | 3,853 | |
Plant assets, net | | 247,981 | | | 233,541 | | | 208,871 | |
Total assets | $ | 487,571 | | $ | 420,320 | | $ | 361,100 | |
Liabilities and Equity | | | | | | | | | |
Accounts payable | $ | 117,763 | | $ | 68,903 | | $ | 46,235 | |
Long-term notes payable secured by mortgages on plant assets | | 88,913 | | | 93,773 | | | 77,409 | |
Common stock, $10 par value | | 162,500 | | | 162,500 | | | 162,500 | |
Retained earnings | | 118,395 | | | 95,144 | | | 74,956 | |
Total liabilities and equity | $ | 487,571 | | $ | 420,320 | | $ | 361,100 | |
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The companys income statements for the years ended December 31, 2017 and 2016, follow. Assume that all sales are on credit:
For Year Ended December 31 | 2017 | 2016 |
Sales | | | | $ | 633,842 | | | | | $ | 500,181 | |
Cost of goods sold | $ | 386,644 | | | | | $ | 325,118 | | | | |
Other operating expenses | | 196,491 | | | | | | 126,546 | | | | |
Interest expense | | 10,775 | | | | | | 11,504 | | | | |
Income taxes | | 8,240 | | | | | | 7,503 | | | | |
Total costs and expenses | | | | | 602,150 | | | | | | 470,671 | |
Net income | | | | $ | 31,692 | | | | | $ | 29,510 | |
Earnings per share | | | | $ | 1.95 | | | | | $ | 1.82 | |
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(1) Compute days' sales uncollected. Days' Sales Uncollected X Days - Days' Sales Uncollected 1 Choose Denominator: Current assets Choose Numerator: Net sales 2017: 2016: Days' Sales Uncollected 0 days 0 days (2) Compute accounts receivable turnover. Accounts Receivable Turnover 1 Choose Denominator: Choose Numerator: Accounts Receivable Turnover Accounts receivable turnover times times 2017: 2016: (3) Compute inventory turnover. Inventory Turnover Choose Denominator: Choose Numerator: = Inventory Turnover Inventory turnover times times 2017: 2016: (4) Compute days' sales in inventory. Days' Sales In Inventory Choose Numerator: 1. Choose Denominator: Days Days' Sales In Inventory Days' sales in inventory 0 days 0 days 2017: 2016
Answer & Explanation
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