Requlred Informetlon [The following information applies to the questions display
ID: 2338848 • Letter: R
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 2016Explanation / 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.