Requlred Informetlon [The following information applies to the questions display

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Requlred Informetlon [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 2817 2816 $ 27,862 $31,634 $ 31,672 54, 18e 59,88e 3,519 285.449-4 162,309 445, 326 383,982 $318,68e 89,680 111,588 8,715 62,788 82,58e 8, 384 Liabilities and Equity Accounts payable Long- $114,213 66,826 $ 42,229 term notes payable secured by mortgages on plant assets Common stock, $19 par value Retained earnings Total liabilities and equity 7e, 782 162,580 162, 58e 63.63835 169 445, 326 383,982 $318,68e 86, 233 162,580 98,946 The company's income statements for the years ended December 31, 2017 and 2016, follow. Assume that all sales are on credit For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income 2017 2816 $578,924 456,843 353,144 179,466 9,842 7,526 $296,948 115,581 18,587 6,853 549.97 429,889 $26,954 1.66 $ 28,946 Earnings per share 1.78 (3) Compute inventory turnover. 2017 imes 2016 imes

Explanation / Answer

Inventory Turnover

Choose Numerator

/

Choose Denominator

=

Inventory Turnover

Cost of goods sold

/

Average inventory

=

2017

$ 353,144

/

(111500+82500)/2= $ 97,000

=

3.64 times

2016

$ 296,948

/

(82500+59000)/2= $ 70,750

=

4.20 times

Inventory Turnover

Choose Numerator

/

Choose Denominator

=

Inventory Turnover

Cost of goods sold

/

Average inventory

=

2017

$ 353,144

/

(111500+82500)/2= $ 97,000

=

3.64 times

2016

$ 296,948

/

(82500+59000)/2= $ 70,750

=

4.20 times

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