exercise 17 9 liquidity analysis and interpretation l o p3 415234

Sanderson Company’s year end balance sheets follow. At December 31 2012 2011 2010 Assets Cash $ 30,800 $ 35,625 $ 36,800 Accounts receivable, net 88,500 62,500 49,200 Merchandise inventory 111,500 82,500 53,000 Prepaid expenses 9,700 9,375 4,000 Plant assets, net 277,500 255,000 229,500 Total assets $ 518,000 $ 445,000 $ 372,500 Liabilities and Equity Accounts payable $ 128,900 $ 75,250 $ 49,250 Long term notes payable secured by mortgages on plant assets 97,500 102,500 82,500 Common stock, $10 par value 162,500 162,500 162,500 Retained earnings 129,100 104,750 78,250 Total liabilities and equity $ 518,000 $ 445,000 $ 372,500 The company’s income statements for the years ended December 31, 2012 and 2011, follow. Assume that all sales are on credit: For Year Ended December 31 2012 2011 Sales $ 672,500 $ 530,000 Cost of goods sold $ 410,225 $ 344,500 Other operating expenses 208,550 133,980 Interest expense 11,100 12,300 Income taxes 8,525 7,845 Total costs and expenses 638,400 498,625 Net income $ 34,100 $ 31,375 Earnings per share $ 2.10 $ 1.93 references Exercise 17 9 Part 1 (1) Compute days’ sales uncollected. (Use 365 days a year. Do not round intermediate calculations and round your final answers to the nearest whole number.) Days’ sales uncollected 2012 days 2011 days check my workeBook LinkView Hint #1references Exercise 17 9 Part 2 (2) Compute accounts receivable turnover. (Round your answers to 1 decimal place.) Accounts receivable turnover 2012 times 2011 times check my workeBook LinkView Hint #1references Exercise 17 9 Part 3 (3) Compute inventory turnover. (Round your answers to 1 decimal place.) Inventory turnover 2012 times 2011 times 4. Exercise 17 9 Part 4 (4) Compute days’ sales in inventory. (Use 365 days a year. Do not round intermediate calculations and round your final answers to the nearest whole number.) Days’ sales in inventory 2012 days 2011 days