Requlred Informetlon [The following information applies to the questions display

Question

Requlred Informetlon [The following information applies to the questions displayed below. Simon Company's year-end balance sheets follow. Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets $ 27,862 $31,634 $ 31,672 54, 18e 59,88e 3,519 62,788 82,58e 8, 384 288,449 198,764 89,680 111,58e 8,715 445, 326 383,982 $318,68e 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 86, 233 82,388 $ 445,326 98,946 162,580 162, 58e 63,630 383,992 7e, 782 162, 58e 35,169 318,680 $. 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 2817 2816 $578,924 456,843 353,144 179,466 9,842 7,526 $296,948 115, 581 18,587 6,853 549,978 e 429,889 $26,954 1.66 $ 28,946 Earnings per share 1.78 (2) Compute accounts receivable turnover Accounts Receivable Turnover Choose Accounts Receivable Turnover Accounts receivable turnover imes imes 2017 2016

Explanation / Answer

For 2016

Average accounts receivables = (Begining receivables + Ending receivables)/2

= (54,100 + 62,700)/2

= $58,400

Accounts receivables turnover = Net credit sales/Average accounts receiveables

= 456,843/58,400

= 7.82

For 2017

Average accounts receivables = (Begining receivables + Ending receivables)/2

= (62,700 + 89,600)/2

= $76,150

Accounts receivables turnover = Net credit sales/Average accounts receiveables

= 578,924/76,150

= 7.60

For 2016

Common stockholders' equity in the begining = Common stock + Retained earnings

= 162,500 + 35,169

= $197,669

Common stockholders' equity at the end = Common stock + Retained earnings

= 162,500 + 63,630

= $226,130

Average common stockholders' equity = (Common stockholders' equity in the begining + Common stockholders' equity at the end)/2

= (197,669 + 226,130)/2

= $211,899.5

Return on common stockholders equity = Net income/Average common stockholders equity

= 26,954/211,899.5

= 12.72%

For 2017

Common stockholders' equity in the begining = Common stock + Retained earnings

= 162,500 + 63,630

= $226,130

Common stockholders' equity at the end = Common stock + Retained earnings

= 162,500 + 82,380

= $244,880

Average common stockholders' equity = (Common stockholders' equity in the begining + Common stockholders' equity at the end)/2

= (226,130 + 244,880)/2

= $235,505

Return on common stockholders equity = Net income/Average common stockholders equity

= 28,946/235,505

= 12.29%

For 2016

Price earning ratio = Market price of 1 common share/Earning per share

  

Dividend yield = Dividend per share/Market price per common share

Since market price of 1 common share is not given in the question, hence Price earning ratio and Dividend yield ratio cannot be calculated. Feel free to ask if you have any doubt. Thanks.

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.