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 $ 35,180 99,964 128, 199 11,440 309,799 $ 584,582 $ 40,719 69,142 92,298 10,477 291,314 $ 503,950 $ 148,472 111,000 163,500 161,610 $ 584,582 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 $ 41,576 55,434 61,441 4,806 260,943 $ 424,200 $ 85,168 115,909 163,500 139,373 $ 503,950 $ 54,875 95,623 163,500 110,202 $ 424,200 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?

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 $ 35,180 99,964 128, 199 11,440 309,799 $ 584,582 $ 40,719 69,142 92,298 10,477 291,314 $ 503,950 $ 148,472 111,000 163,500 161,610 $ 584,582 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 $ 41,576 55,434 61,441 4,806 260,943 $ 424,200 $ 85,168 115,909 163,500 139,373 $ 503,950 $ 54,875 95,623 163,500 110,202 $ 424,200 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?

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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Required Information Use the following information for the Exercises below. (Algo) [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 1 Year Ago 2 Years Ago $ 29,387 58,429 $ 29,125 40,023 66,638 $ 23,920 69,328 88,056 7,860 224,536 $ 413,700 7,564 282,628 $ 356,638 81,206 162,500 54,468 $101,981 76,998 $ 58,464 162,500 72,221 $ 413,780 $ 356,638 For both the current year and one year ago, compute the following ratios: 43,855 3,236 184,761 $ 300,200 $ 38,438 64,354 162,580 34,988 $ 300,200 Exercise 17-6 (Algo) Common-size percents LO P2 1. Express the balance sheets in common-size percents. 2. Assuming annual sales have not changed in the last three…
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