Required information [The following information applies to the questions display

Question

Required information [The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. 2016 2015 At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets 2017 $ 32,970 38,539 40,554 89,600 62,100 53,600 ,500 85,000 53,000 4,506 324,532 295,813 266,340 $570,219 $491,568 $418,000 10,61710,116 Liabilities and Equity Accounts payable Long-term notes payable $139,145 $ 81,413 $ 54,072 secured by mortgages on plant assetS Common stock, $10 par value Retained earnings Total liabilities and equity 105,057 110,79990,530 162,500 162,500 162,500 163,517 136,856 110,898 $570,219 $491,568 $418,000 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 2016 $741,285 $584,966 $452,184 229,798 12,602 9,637 $380,228 147,996 13,454 8,774 704,221 $ 37,064 $ 2.28 550,452 $ 34,514 $ 2.12 Earnings per share (4) Compute days' sales in inventory Choose Numerator Days' Sales In Invento Choose Denominator: Days' Sales In Invento Days' sales in invento x Days 201 201 days days

Explanation / Answer

days sales in inventory

cost of goods sold

/

average inventory

days

days sales in inventory

2017

98750

/

452184

X

365

=

79.71

2016

69000

/

380228

X

365

=

66.23

2017

average inventory

(112500+85000)/2

98750

average inventory 2016

(85000+53000)/2

69000

days sales in inventory

cost of goods sold

/

average inventory

days

days sales in inventory

2017

98750

/

452184

X

365

=

79.71

2016

69000

/

380228

X

365

=

66.23

2017

average inventory

(112500+85000)/2

98750

average inventory 2016

(85000+53000)/2

69000

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