Simon Company's year-end balance sheets follow.   At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets                     Cash   $ 33,325   $ 40,941   $ 41,409   Accounts receivable, net     95,601     68,169     55,770   Merchandise inventory     123,917     93,757     59,995   Prepaid expenses     11,170     10,643     4,555   Plant assets, net     312,345     283,350     260,771   Total assets   $ 576,358   $ 496,860   $ 422,500   Liabilities and Equity                     Accounts payable   $ 143,513   $ 82,290   $ 55,212   Long-term notes payable secured by mortgages on plant assets     111,606     111,992     92,439   Common stock, $10 par value     163,500     163,500     163,500   Retained earnings     157,739     139,078     111,349   Total liabilities and equity   $ 576,358   $ 496,860   $ 422,500       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
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Simon Company's year-end balance sheets follow.
 

At December 31 Current Yr 1 Yr Ago 2 Yrs Ago
Assets                    
Cash   $ 33,325   $ 40,941   $ 41,409  
Accounts receivable, net     95,601     68,169     55,770  
Merchandise inventory     123,917     93,757     59,995  
Prepaid expenses     11,170     10,643     4,555  
Plant assets, net     312,345     283,350     260,771  
Total assets   $ 576,358   $ 496,860   $ 422,500  
Liabilities and Equity                    
Accounts payable   $ 143,513   $ 82,290   $ 55,212  
Long-term notes payable secured by
mortgages on plant assets
    111,606     111,992     92,439  
Common stock, $10 par value     163,500     163,500     163,500  
Retained earnings     157,739     139,078     111,349  
Total liabilities and equity   $ 576,358   $ 496,860   $ 422,500  
 

 
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?

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