Simon Company’s year-end balance sheets follow. The company’s income statements for the years ended December

Simon Company’s year-end balance sheets follow.

	At December 31			2015			2014			2013
	Assets
	Cash		$	30,879		$	36,094		$	36,138
	Accounts receivable, net			89,200			62,800			53,000
	Merchandise inventory			115,000			82,000			52,000
	Prepaid expenses			9,944			9,475			4,015
	Plant assets, net			263,101			247,669			209,247
	Total assets		$	508,124		$	438,038		$	354,400
	Liabilities and Equity
	Accounts payable		$	130,319		$	76,249		$	48,184
	Long-term notes payable secured by   mortgages on plant assets			98,393			103,771			80,672
	Common stock, $10 par value			162,500			162,500			162,500
	Retained earnings			116,912			95,518			63,044
	Total liabilities and equity		$	508,124		$	438,038		$	354,400

  

The company’s income statements for the years ended December 31, 2015 and 2014, follow. Assume that all sales are on credit:

For Year Ended December 31	2015						2014
Sales				$	660,561					$	521,265
Cost of goods sold	$	402,942					$	338,822
Other operating expenses		204,774						131,880
Interest expense		11,230						11,989
Income taxes		8,587						7,819
Total costs and expenses					627,533						490,510
Net income				$	33,028					$	30,755
Earnings per share				$	2.03					$	1.89

(1)	Compute days' sales uncollected.

Explanation:

Days' sales uncollected

	$89,200
2015:		× 365	=	49.3 days
	$660,561
	$62,800
2014:		× 365	=	44.0 days
	$521,265

(2)	Compute accounts receivable turnover.

Explanation:

Accounts receivable turnover

	$660,561
2015:		=	8.7 times
	($89,200 + $62,800)/2
	$521,265
2014:		=	9.0 times
	($62,800 + $53,000)/2

(3)	Compute inventory turnover.

Explanation:

Inventory turnover

	$402,942
2015:		=	4.1 times
	($115,000 + $82,000)/2
	$338,822
2014:		=	5.1 times
	($82,000 + $52,000)/2

(4)	Compute days' sales in inventory.

Explanation:

Days' sales in inventory

	$115,000
2015:		× 365	=	104.2 days
	$402,942
	$82,000
2014:		× 365	=	88.3 days
	$338,822