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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 $ 28,479 • Required 1A • Required 1B • Required 2A • Required 2B 83,373 105,875 9,449 260,388 $ 487,564 $ 123,832 1 Year Ago 2 Years Ago 111,320 $ 33,625 58,844 80,091 8,827 238,927 $ 420,314 $ 69,612 98,606 162,500 $ 34,326 89,596 45,768 49,737 4,009 Long-term notes payable 88,912 Common stock, $10 par value 163,500 Retained earnings 64,626 Total liabilities and equity $ 487,564 $ 420,314 $ 353,800 For both the current year and one year ago, compute the following ratios: (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. 219,960 $ 353,800 $ 46,702 78,972 163,500 (2-b) Did the acid-test ratio improve or worsen over the three-year period? Complete this question by entering your answers in the tabs 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 $ 28,479 • Required 1A • Required 1B • Required 2A • Required 2B 83,373 105,875 9,449 260,388 $ 487,564 $ 123,832 1 Year Ago 2 Years Ago 111,320 $ 33,625 58,844 80,091 8,827 238,927 $ 420,314 $ 69,612 98,606 162,500 $ 34,326 89,596 45,768 49,737 4,009 Long-term notes payable 88,912 Common stock, $10 par value 163,500 Retained earnings 64,626 Total liabilities and equity $ 487,564 $ 420,314 $ 353,800 For both the current year and one year ago, compute the following ratios: (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. 219,960 $ 353,800 $ 46,702 78,972 163,500 (2-b) Did the acid-test ratio improve or worsen over the three-year period? Complete this question by entering your answers in the tabs below.

FINANCIAL ACCOUNTING
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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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 Ratio Current Year Current Year: $ 28,479 1 Year Ago: 2 Years Ago: 83,373 105,875 9,449 260,388 $ 487,564 $ 123,832 1 Year Ago 2 Years Ago $ 33,625 1 58,844 80,091 1 8,827 238,927 $ 420,314 $ 69,612 • Required 1A • Required 1B • Required 2A • Required 2B Compute the current ratio for each of the three years. 98,606 Long-term notes payable 88,912 Common stock, $10 par value 163,500 Retained earnings 111,320 Total liabilities and equity $ 487,564 $ 420,314 For both the current year and one year ago, compute the following ratios: (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three-year period? Complete this question by entering your answers in the tabs below. 162,500 89,596 Numerator: 1 Denominator: = = $ 34,326 = 45,768 = 49,737 4,009 219,960 $ 353,800 $ 46,702 78,972 163,500 64,626 = Current ratio $ 353,800 Current Ratio to 1 to 1 to 1
Transcribed Image Text: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 Ratio Current Year Current Year: $ 28,479 1 Year Ago: 2 Years Ago: 83,373 105,875 9,449 260,388 $ 487,564 $ 123,832 1 Year Ago 2 Years Ago $ 33,625 1 58,844 80,091 1 8,827 238,927 $ 420,314 $ 69,612 • Required 1A • Required 1B • Required 2A • Required 2B Compute the current ratio for each of the three years. 98,606 Long-term notes payable 88,912 Common stock, $10 par value 163,500 Retained earnings 111,320 Total liabilities and equity $ 487,564 $ 420,314 For both the current year and one year ago, compute the following ratios: (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three-year period? Complete this question by entering your answers in the tabs below. 162,500 89,596 Numerator: 1 Denominator: = = $ 34,326 = 45,768 = 49,737 4,009 219,960 $ 353,800 $ 46,702 78,972 163,500 64,626 = Current ratio $ 353,800 Current Ratio to 1 to 1 to 1
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