At December 31 Assets Cash Accounts receivable net Merchandi

At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured 2017 2016 2015 s 34,712 40,576 40,625 89,300 62,100 58,400 110,500 85,000 52,000 11,179 10, 651 4,514 325,519 294,095 242,861 $571,210 $492,422 $398,400 $146,498 85,716 S 54,166 by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity 110, 609 116, 655 90,688 162, 500 162, 500 162,500 151, 603 127,55191,046 $571,210 $492, 422 $398, 400 The company\'s income statements for the years ended December 31, 2017 and 2016, follow. Assume that sales are on credit 2017 For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income 2016 $742,573 $585, 982 $452,970 230, 198 12, 624 $380,888 148, 253 13, 478 8,790 9.053705, 445 551,409 $ 34,573 $ 2.13 $37,128 Earnings per share $ 2.28

Solution

Days\' Sales In Inventory Ending Inventory / Cost of Goods Sold X 365 Days = Days\' Sales in Inventory 2017 110500 / 452970 X 365 Days =                     89.04 days 2016 85000 / 380888 X 365 Days =                     81.45 days Some also calculate with 360 days: Ending Inventory / Cost of Goods Sold X 360 Days = Days\' Sales in Inventory 2017 110500 / 452970 X 360 Days =                     87.82 days 2016 85000 / 380888 X 360 Days =                     80.34 days