Required information [The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Current Year 1 Year Ago $ 24,000 70,261 86,573 7,963 222,088 $ 410,885 $ 28,904 50,085 65,529 7,290 202,403 $ 354,211 $ 101,287 75,701 162,500. 71,397 $410,885 Liabilities and Equity Accounts payable Long-term notes payable. Common stock, $10 par value Retained earnings Total liabilities and equity For both the current year and one year ago, compute the following ratios: 2 Years Ago $ 58,664 79,024 162,500 54,023 $ 354,211 $ 30,415 39,758 44,054 3,413 183,560 $ 301,200 $ 40,156 65,234 162,500 33,310 $ 301,200 1. Express the balance sheets in common-size percents. 2. Assuming annual sales have not changed in the last three years, is the change in accounts receivable as a percentage of total assets favorable or unfavorable? 3. Assuming annual sales have not changed in the last three years, is the change in merchandise inventory as a percentage of total assets favorable or unfavorable?
Required information [The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Current Year 1 Year Ago $ 24,000 70,261 86,573 7,963 222,088 $ 410,885 $ 28,904 50,085 65,529 7,290 202,403 $ 354,211 $ 101,287 75,701 162,500. 71,397 $410,885 Liabilities and Equity Accounts payable Long-term notes payable. Common stock, $10 par value Retained earnings Total liabilities and equity For both the current year and one year ago, compute the following ratios: 2 Years Ago $ 58,664 79,024 162,500 54,023 $ 354,211 $ 30,415 39,758 44,054 3,413 183,560 $ 301,200 $ 40,156 65,234 162,500 33,310 $ 301,200 1. Express the balance sheets in common-size percents. 2. Assuming annual sales have not changed in the last three years, is the change in accounts receivable as a percentage of total assets favorable or unfavorable? 3. Assuming annual sales have not changed in the last three years, is the change in merchandise inventory as a percentage of total assets favorable or unfavorable?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required information
[The following information applies to the questions displayed below.]
Simon Company's year-end balance sheets follow.
At December 31
Assets
Cash
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
Liabilities and Equity
Accounts payable
Current Year 1 Year Ago
$ 24,000
70,261
86,573
7,963
222,088
$ 410,885
$ 101,287
75,701
162,500
71,397
$ 410,885
$ 28,904
50,085
65,529
7,290
202,403
$ 354,211
$58,664
79,024
162,500
54,023
2 Years Ago
$ 40,156
65,234
162,500
33,310
$ 354,211 $ 301,200
$ 30,415
39,758
44,054
3,413
183,560
$ 301,200
Long-term notes payable
Common stock, $10 par value
Retained earnings
Total liabilities and equity
For both the current year and one year ago, compute the following ratios:
1. Express the balance sheets in common-size percents.
2. Assuming annual sales have not changed in the last three years, is the change in accounts receivable as a percentage of total.
assets favorable or unfavorable?
3. Assuming annual sales have not changed in the last three years, is the change in merchandise inventory as a percentage of total
assets favorable or unfavorable?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6a703dc1-c203-45b3-a859-e6781f25ebca%2F1170c0db-2b4d-426f-8cfc-1eed903ead52%2Fajcv09_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Simon Company's year-end balance sheets follow.
At December 31
Assets
Cash
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
Liabilities and Equity
Accounts payable
Current Year 1 Year Ago
$ 24,000
70,261
86,573
7,963
222,088
$ 410,885
$ 101,287
75,701
162,500
71,397
$ 410,885
$ 28,904
50,085
65,529
7,290
202,403
$ 354,211
$58,664
79,024
162,500
54,023
2 Years Ago
$ 40,156
65,234
162,500
33,310
$ 354,211 $ 301,200
$ 30,415
39,758
44,054
3,413
183,560
$ 301,200
Long-term notes payable
Common stock, $10 par value
Retained earnings
Total liabilities and equity
For both the current year and one year ago, compute the following ratios:
1. Express the balance sheets in common-size percents.
2. Assuming annual sales have not changed in the last three years, is the change in accounts receivable as a percentage of total.
assets favorable or unfavorable?
3. Assuming annual sales have not changed in the last three years, is the change in merchandise inventory as a percentage of total
assets favorable or unfavorable?
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