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 $ 31,800 89,500 112,500 10,700 278,500 $ 523,000 1 Year Ago $ 35,625 62,500 82,500 9,375 255,000 $ 445,000 $ 129,900 98,500 163,500 131, 100 $ 523,000 2 Years Ago 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: $ 37,800 50,200 54,000 5,000 230,500 $ 377,500 $ 75,250 101,500 163,500 104,750 $ 445,000 $ 377,500 $ 51,250 83,500 163,500 79,250 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 $ 31,800 89,500 112,500 10,700 278,500 $ 523,000 1 Year Ago $ 35,625 62,500 82,500 9,375 255,000 $ 445,000 $ 129,900 98,500 163,500 131, 100 $ 523,000 2 Years Ago 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: $ 37,800 50,200 54,000 5,000 230,500 $ 377,500 $ 75,250 101,500 163,500 104,750 $ 445,000 $ 377,500 $ 51,250 83,500 163,500 79,250 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
Long-term notes payable
Common stock, $10 par value
Retained earnings
Total liabilities and equity
Current Year
$ 31,800
89,500
112,500
10,700
278,500
$ 523,000
$ 129,900
98,500
163,500
131, 100
$ 523,000
1 Year Ago
$ 35,625
62,500
82,500
9,375
255,000
$ 445,000
$75,250
101,500
163,500
104,750
$ 445,000
For both the current year and one year ago, compute the following ratios:
2 Years Ago
$ 37,800
50,200
54,000
5,000
230,500
$ 377,500
$ 51,250
83,500
163,500
79,250
$ 377,500
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%2F9b07ba7b-8a11-48b2-8871-a47f6c9d0bf5%2Ff0dd4b63-d29c-4dad-8841-85ab1b856145%2Fwqdmft_processed.png&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
Long-term notes payable
Common stock, $10 par value
Retained earnings
Total liabilities and equity
Current Year
$ 31,800
89,500
112,500
10,700
278,500
$ 523,000
$ 129,900
98,500
163,500
131, 100
$ 523,000
1 Year Ago
$ 35,625
62,500
82,500
9,375
255,000
$ 445,000
$75,250
101,500
163,500
104,750
$ 445,000
For both the current year and one year ago, compute the following ratios:
2 Years Ago
$ 37,800
50,200
54,000
5,000
230,500
$ 377,500
$ 51,250
83,500
163,500
79,250
$ 377,500
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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