Required information [The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. Current Year 1 Year Ago 2 Years Ago At December 31 Assets Cash Accounts receivable, net $ 27,731 81,202 $ 33,418 59,650 $ 35,496 103,138 9,022 263,462 88,363 77,278 9,035 238,339 $ 417,720 45,490 50,419 3,753 212,942 $ 348,100 $ 45,949 77,699 162,500 61,952 162,500 109,418 $ 69,183 97,036 162,500 89,001 $ 484,555 $ 417,720 $ 348,100 Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity $ 484,555 Accounts payable $ 124,274 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?

Required information [The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. Current Year 1 Year Ago 2 Years Ago At December 31 Assets Cash Accounts receivable, net $ 27,731 81,202 $ 33,418 59,650 $ 35,496 103,138 9,022 263,462 88,363 77,278 9,035 238,339 $ 417,720 45,490 50,419 3,753 212,942 $ 348,100 $ 45,949 77,699 162,500 61,952 162,500 109,418 $ 69,183 97,036 162,500 89,001 $ 484,555 $ 417,720 $ 348,100 Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity $ 484,555 Accounts payable $ 124,274 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?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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