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 1 Year Ago $ 25,647 73,597 93,460 8,096 229,592 $430,392 $ 107, 168 81,723 163,500 78,001 $430,392 Exercise 13-7 (Algo) Analyzing liquidity LO P3 $ 29,682 52,463 69,327 7,558 211,998 $ 371,028 $ 62,704 86,190 163,500 58,634 $ 371,028 (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? 2 Years Ago $30,610 41,646 44,353 3,505 195,386 $ 315,500 $ 41,230 70,423 162,500 41,347 $ 315,500

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 1 Year Ago $ 25,647 73,597 93,460 8,096 229,592 $430,392 $ 107, 168 81,723 163,500 78,001 $430,392 Exercise 13-7 (Algo) Analyzing liquidity LO P3 $ 29,682 52,463 69,327 7,558 211,998 $ 371,028 $ 62,704 86,190 163,500 58,634 $ 371,028 (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? 2 Years Ago $30,610 41,646 44,353 3,505 195,386 $ 315,500 $ 41,230 70,423 162,500 41,347 $ 315,500

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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