Simon Company's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets $ 32,189 $ 31,565 56,331 73,701 8,366 227,797 Cash $ Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net 26,720 79,023 97,370 8,956 250,056 43,388 45,742 3,652 204,353 Total assets $ 462,125 $ 398,384 $ 328,700 Liabilities and Equity $ 112,768 67,327 $ 43,388 Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings 89,486 163,500 96,371 71,190 163,500 50,622 $ 398,384 $ 328,700 94,377 163,500 73,180 Total liabilities and equity $ 462,125 1. Express the balance sheets in common-size percents. (Do not round intermediate calculations and round your final percentage answers to 1 decimal place.) 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 Current Yr 1 Yr Ago 2 Yrs Ago Assets $ 32,189 $ 31,565 56,331 73,701 8,366 227,797 Cash $ Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net 26,720 79,023 97,370 8,956 250,056 43,388 45,742 3,652 204,353 Total assets $ 462,125 $ 398,384 $ 328,700 Liabilities and Equity $ 112,768 67,327 $ 43,388 Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings 89,486 163,500 96,371 71,190 163,500 50,622 $ 398,384 $ 328,700 94,377 163,500 73,180 Total liabilities and equity $ 462,125 1. Express the balance sheets in common-size percents. (Do not round intermediate calculations and round your final percentage answers to 1 decimal place.) 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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