[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 Current Year $ 27,970 80, 264 100,917 9,097 251, 134 $ 469,382 $ 116,876 90,891 163,500 98,115 $ 469,382 1 Year Ago $ 31,400 58,349 77,104 8,412 229,375 $ 404, 640 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: Exercise 13-7 (Algo) Analyzing liquidity LO P3 2 Years Ago $ 33,717 45,401 48,361 3,635 206,086 $ 337,200 $ 70,436 $ 45,846 92,137 73,776 163,500 163,500 54,078 78,567 $ 404,640 $ 337,200 (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?
[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 Current Year $ 27,970 80, 264 100,917 9,097 251, 134 $ 469,382 $ 116,876 90,891 163,500 98,115 $ 469,382 1 Year Ago $ 31,400 58,349 77,104 8,412 229,375 $ 404, 640 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: Exercise 13-7 (Algo) Analyzing liquidity LO P3 2 Years Ago $ 33,717 45,401 48,361 3,635 206,086 $ 337,200 $ 70,436 $ 45,846 92,137 73,776 163,500 163,500 54,078 78,567 $ 404,640 $ 337,200 (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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
please answer 2-a and 2-b
![[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
Current Year
$ 27,970
80, 264
100,917
9,097
251, 134
$ 469,382
$ 116,876
90,891
163,500
98,115
$ 469,382
1 Year Ago
$ 31,400
58,349
77,104
8,412
229,375
$ 404, 640
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:
Exercise 13-7 (Algo) Analyzing liquidity LO P3
2 Years Ago
$ 33,717
45,401
48,361
3,635
206,086
$ 337,200
$ 70,436
$ 45,846
92,137
73,776
163,500
163,500
54,078
78,567
$ 404,640 $ 337,200
(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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5a9aa902-655f-41dd-a6be-bec2f32ef4ca%2F84856af0-a80c-4ae5-bdc6-3c258d8bfeb6%2F3lcglyb_processed.png&w=3840&q=75)
Transcribed Image Text:[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
Current Year
$ 27,970
80, 264
100,917
9,097
251, 134
$ 469,382
$ 116,876
90,891
163,500
98,115
$ 469,382
1 Year Ago
$ 31,400
58,349
77,104
8,412
229,375
$ 404, 640
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:
Exercise 13-7 (Algo) Analyzing liquidity LO P3
2 Years Ago
$ 33,717
45,401
48,361
3,635
206,086
$ 337,200
$ 70,436
$ 45,846
92,137
73,776
163,500
163,500
54,078
78,567
$ 404,640 $ 337,200
(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?
Transcribed Image Text:(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.
Required 1A Required 1B Required 2A Required 2B
Compute the current ratio for each of the three years.
Current Year:
1 Year Ago:
2 Years Ago:
Numerator:
I
/
/
1
/
Current Ratio
Denominator:
=
=
=
=
Current Ratio
Current ratio
to 1
to 1
to 1
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education