The Common Size percentages for the given balance sheets The Common Size percentages for the given balance sheets are as follows: Simon Company Common Size Balance Sheet Current Year (%) 1 Year ago (%) 2 Years ago (%) ASSETS: Cash 6.1% 8.0% 10.0% Accounts Receivable, net 17.1% 14.0% 13.3% Merchandise Inventory 21.5% 18.5% 14.3% Prepaid Expenses 2.0% 2.1% 1.3% Plant assets, net 53.3% 57.3% 61.1% TOTAL ASSETS 100.0% 100.0% 100.0% LIABILITIES AND EQUITY: Accounts Payable 24.8% 16.9% 13.6% Long Term Notes Payable 18.8% 22.8% 22.1% Common Stock, $78 par value 31.3% 36.7% 43.3% Retained Earnings 25.1% 23.5% 21.0% TOTAL LIABILITIES AND EQUITY 100.0% 100.0% 100.0% The Common Size percentages for the given balance sheets are calculated as follows: Simon Company Common Size Balance Sheet Current Year ($) Current Year (%) 1 Year ago ($) 1 Year ago (%) 2 Years ago ($) 2 Years ago (%) A B = A / 523000 C D = C/445000 C D = C/377500 ASSETS: Cash 31,800 6.1% 35,625 8.0% 37,800 10.0% Accounts Receivable, net 89,500 17.1% 62,500 14.0% 50,200 13.3% Merchandise Inventory 112,500 21.5% 82,500 18.5% 54,000 14.3% Prepaid Expenses 10,700 2.0% 9,375 2.1% 5,000 1.3% Plant assets, net 278,500 53.3% 255,000 57.3% 230,500 61.1% TOTAL ASSETS 523,000 100.0% 445,000 100.0% 377,500 100.0% LIABILITIES AND EQUITY: Accounts Payable 129,900 24.8% 75,250 16.9% 51,250 13.6% Long Term Notes Payable 98,500 18.8% 101,500 22.8% 83,500 22.1% Common Stock, $78 par value 163,500 31.3% 163,500 36.7% 163,500 43.3% Retained Earnings 131,100 25.1% 104,750 23.5% 79,250 21.0% TOTAL LIABILITIES AND EQUITY 523,000 100.0% 445,000 100.0% 377,500 100.0% Concept Introduction: Common Size Financial Statement: Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Question

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 17, Problem 6E

Requirement-1

To determine

To Calculate:

The Common Size percentages for the given balance sheets

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
Current Year (%) 1 Year ago (%) 2 Years ago (%)
ASSETS:
Cash
6.1%
8.0%
10.0%
Accounts Receivable, net
17.1%
14.0%
13.3%
Merchandise Inventory
21.5%
18.5%
14.3%
Prepaid Expenses
2.0%
2.1%
1.3%
Plant assets, net
53.3%
57.3%
61.1%
TOTAL ASSETS 100.0% 100.0% 100.0%
LIABILITIES AND EQUITY:
Accounts Payable
24.8%
16.9%
13.6%
Long Term Notes Payable
18.8%
22.8%
22.1%
Common Stock, $78 par value
31.3%
36.7%
43.3%
Retained Earnings
25.1%
23.5%
21.0%
TOTAL LIABILITIES AND EQUITY 100.0% 100.0% 100.0%

The Common Size percentages for the given balance sheets are calculated as follows:

Simon Company
Common Size Balance Sheet
Current Year ($) Current Year (%) 1 Year ago ($) 1 Year ago (%) 2 Years ago ($) 2 Years ago (%)
A B = A / 523000 C D = C/445000 C D = C/377500
ASSETS:
Cash
31,800
6.1%
35,625
8.0%
37,800
10.0%
Accounts Receivable, net
89,500
17.1%
62,500
14.0%
50,200
13.3%
Merchandise Inventory
112,500
21.5%
82,500
18.5%
54,000
14.3%
Prepaid Expenses
10,700
2.0%
9,375
2.1%
5,000
1.3%
Plant assets, net
278,500
53.3%
255,000
57.3%
230,500
61.1%
TOTAL ASSETS 523,000 100.0% 445,000 100.0% 377,500 100.0%
LIABILITIES AND EQUITY:
Accounts Payable
129,900
24.8%
75,250
16.9%
51,250
13.6%
Long Term Notes Payable
98,500
18.8%
101,500
22.8%
83,500
22.1%
Common Stock, $78 par value
163,500
31.3%
163,500
36.7%
163,500
43.3%
Retained Earnings
131,100
25.1%
104,750
23.5%
79,250
21.0%
TOTAL LIABILITIES AND EQUITY 523,000 100.0% 445,000 100.0% 377,500 100.0%

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Requirement-1

Expert Solution

Answer to Problem 6E

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

Explanation of Solution

The Common Size percentages for the given balance sheets are calculated as follows:

Simon Company
Common Size Balance Sheet

	Current Year ($)	Current Year (%)	1 Year ago ($)	1 Year ago (%)	2 Years ago ($)	2 Years ago (%)
	A	B = A / 523000	C	D = C/445000	C	D = C/377500
ASSETS:
Cash	31,800	6.1%	35,625	8.0%	37,800	10.0%
Accounts Receivable, net	89,500	17.1%	62,500	14.0%	50,200	13.3%
Merchandise Inventory	112,500	21.5%	82,500	18.5%	54,000	14.3%
Prepaid Expenses	10,700	2.0%	9,375	2.1%	5,000	1.3%
Plant assets, net	278,500	53.3%	255,000	57.3%	230,500	61.1%
TOTAL ASSETS	523,000	100.0%	445,000	100.0%	377,500	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	129,900	24.8%	75,250	16.9%	51,250	13.6%
Long Term Notes Payable	98,500	18.8%	101,500	22.8%	83,500	22.1%
Common Stock, $78 par value	163,500	31.3%	163,500	36.7%	163,500	43.3%
Retained Earnings	131,100	25.1%	104,750	23.5%	79,250	21.0%
TOTAL LIABILITIES AND EQUITY	523,000	100.0%	445,000	100.0%	377,500	100.0%

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Requirement-2

To determine

To identify:

If the change in the Accounts Receivable is favorable and unfavorable

Requirement-2

Expert Solution

Answer to Problem 6E

The change in the Accounts Receivable is unfavorable.

Explanation of Solution

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

The Accounts receivables as % of total assets are showing an increasing trend over the years, hence the change in the Accounts Receivable is unfavorable.

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Requirement-3

To determine

To identify:

If the change in the Merchandise Inventory as % of Total Assets is favorable and unfavorable

Requirement-3

Expert Solution

Answer to Problem 6E

The change in the Merchandise Inventory as % of Total Assets is unfavorable.

Explanation of Solution

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

The Merchandise Inventory as % of total assets are showing an increasing trend over the years, hence the change in the Merchandise inventory is unfavorable.

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Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 17, Problem 6E

Requirement-1

To determine

To Calculate:

The Common Size percentages for the given balance sheets

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
Current Year (%) 1 Year ago (%) 2 Years ago (%)
ASSETS:
Cash
6.1%
8.0%
10.0%
Accounts Receivable, net
17.1%
14.0%
13.3%
Merchandise Inventory
21.5%
18.5%
14.3%
Prepaid Expenses
2.0%
2.1%
1.3%
Plant assets, net
53.3%
57.3%
61.1%
TOTAL ASSETS 100.0% 100.0% 100.0%
LIABILITIES AND EQUITY:
Accounts Payable
24.8%
16.9%
13.6%
Long Term Notes Payable
18.8%
22.8%
22.1%
Common Stock, $78 par value
31.3%
36.7%
43.3%
Retained Earnings
25.1%
23.5%
21.0%
TOTAL LIABILITIES AND EQUITY 100.0% 100.0% 100.0%

The Common Size percentages for the given balance sheets are calculated as follows:

Simon Company
Common Size Balance Sheet
Current Year ($) Current Year (%) 1 Year ago ($) 1 Year ago (%) 2 Years ago ($) 2 Years ago (%)
A B = A / 523000 C D = C/445000 C D = C/377500
ASSETS:
Cash
31,800
6.1%
35,625
8.0%
37,800
10.0%
Accounts Receivable, net
89,500
17.1%
62,500
14.0%
50,200
13.3%
Merchandise Inventory
112,500
21.5%
82,500
18.5%
54,000
14.3%
Prepaid Expenses
10,700
2.0%
9,375
2.1%
5,000
1.3%
Plant assets, net
278,500
53.3%
255,000
57.3%
230,500
61.1%
TOTAL ASSETS 523,000 100.0% 445,000 100.0% 377,500 100.0%
LIABILITIES AND EQUITY:
Accounts Payable
129,900
24.8%
75,250
16.9%
51,250
13.6%
Long Term Notes Payable
98,500
18.8%
101,500
22.8%
83,500
22.1%
Common Stock, $78 par value
163,500
31.3%
163,500
36.7%
163,500
43.3%
Retained Earnings
131,100
25.1%
104,750
23.5%
79,250
21.0%
TOTAL LIABILITIES AND EQUITY 523,000 100.0% 445,000 100.0% 377,500 100.0%

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Requirement-1

Expert Solution

Answer to Problem 6E

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

Explanation of Solution

The Common Size percentages for the given balance sheets are calculated as follows:

Simon Company
Common Size Balance Sheet

	Current Year ($)	Current Year (%)	1 Year ago ($)	1 Year ago (%)	2 Years ago ($)	2 Years ago (%)
	A	B = A / 523000	C	D = C/445000	C	D = C/377500
ASSETS:
Cash	31,800	6.1%	35,625	8.0%	37,800	10.0%
Accounts Receivable, net	89,500	17.1%	62,500	14.0%	50,200	13.3%
Merchandise Inventory	112,500	21.5%	82,500	18.5%	54,000	14.3%
Prepaid Expenses	10,700	2.0%	9,375	2.1%	5,000	1.3%
Plant assets, net	278,500	53.3%	255,000	57.3%	230,500	61.1%
TOTAL ASSETS	523,000	100.0%	445,000	100.0%	377,500	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	129,900	24.8%	75,250	16.9%	51,250	13.6%
Long Term Notes Payable	98,500	18.8%	101,500	22.8%	83,500	22.1%
Common Stock, $78 par value	163,500	31.3%	163,500	36.7%	163,500	43.3%
Retained Earnings	131,100	25.1%	104,750	23.5%	79,250	21.0%
TOTAL LIABILITIES AND EQUITY	523,000	100.0%	445,000	100.0%	377,500	100.0%

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Requirement-2

To determine

To identify:

If the change in the Accounts Receivable is favorable and unfavorable

Requirement-2

Expert Solution

Answer to Problem 6E

The change in the Accounts Receivable is unfavorable.

Explanation of Solution

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

The Accounts receivables as % of total assets are showing an increasing trend over the years, hence the change in the Accounts Receivable is unfavorable.

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Requirement-3

To determine

To identify:

If the change in the Merchandise Inventory as % of Total Assets is favorable and unfavorable

Requirement-3

Expert Solution

Answer to Problem 6E

The change in the Merchandise Inventory as % of Total Assets is unfavorable.

Explanation of Solution

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

The Merchandise Inventory as % of total assets are showing an increasing trend over the years, hence the change in the Merchandise inventory is unfavorable.

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 17, Problem 6E

Requirement-1

To determine

To Calculate:

The Common Size percentages for the given balance sheets

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
Current Year (%) 1 Year ago (%) 2 Years ago (%)
ASSETS:
Cash
6.1%
8.0%
10.0%
Accounts Receivable, net
17.1%
14.0%
13.3%
Merchandise Inventory
21.5%
18.5%
14.3%
Prepaid Expenses
2.0%
2.1%
1.3%
Plant assets, net
53.3%
57.3%
61.1%
TOTAL ASSETS 100.0% 100.0% 100.0%
LIABILITIES AND EQUITY:
Accounts Payable
24.8%
16.9%
13.6%
Long Term Notes Payable
18.8%
22.8%
22.1%
Common Stock, $78 par value
31.3%
36.7%
43.3%
Retained Earnings
25.1%
23.5%
21.0%
TOTAL LIABILITIES AND EQUITY 100.0% 100.0% 100.0%

The Common Size percentages for the given balance sheets are calculated as follows:

Simon Company
Common Size Balance Sheet
Current Year ($) Current Year (%) 1 Year ago ($) 1 Year ago (%) 2 Years ago ($) 2 Years ago (%)
A B = A / 523000 C D = C/445000 C D = C/377500
ASSETS:
Cash
31,800
6.1%
35,625
8.0%
37,800
10.0%
Accounts Receivable, net
89,500
17.1%
62,500
14.0%
50,200
13.3%
Merchandise Inventory
112,500
21.5%
82,500
18.5%
54,000
14.3%
Prepaid Expenses
10,700
2.0%
9,375
2.1%
5,000
1.3%
Plant assets, net
278,500
53.3%
255,000
57.3%
230,500
61.1%
TOTAL ASSETS 523,000 100.0% 445,000 100.0% 377,500 100.0%
LIABILITIES AND EQUITY:
Accounts Payable
129,900
24.8%
75,250
16.9%
51,250
13.6%
Long Term Notes Payable
98,500
18.8%
101,500
22.8%
83,500
22.1%
Common Stock, $78 par value
163,500
31.3%
163,500
36.7%
163,500
43.3%
Retained Earnings
131,100
25.1%
104,750
23.5%
79,250
21.0%
TOTAL LIABILITIES AND EQUITY 523,000 100.0% 445,000 100.0% 377,500 100.0%

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Requirement-1

Expert Solution

Answer to Problem 6E

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

Explanation of Solution

The Common Size percentages for the given balance sheets are calculated as follows:

Simon Company
Common Size Balance Sheet

	Current Year ($)	Current Year (%)	1 Year ago ($)	1 Year ago (%)	2 Years ago ($)	2 Years ago (%)
	A	B = A / 523000	C	D = C/445000	C	D = C/377500
ASSETS:
Cash	31,800	6.1%	35,625	8.0%	37,800	10.0%
Accounts Receivable, net	89,500	17.1%	62,500	14.0%	50,200	13.3%
Merchandise Inventory	112,500	21.5%	82,500	18.5%	54,000	14.3%
Prepaid Expenses	10,700	2.0%	9,375	2.1%	5,000	1.3%
Plant assets, net	278,500	53.3%	255,000	57.3%	230,500	61.1%
TOTAL ASSETS	523,000	100.0%	445,000	100.0%	377,500	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	129,900	24.8%	75,250	16.9%	51,250	13.6%
Long Term Notes Payable	98,500	18.8%	101,500	22.8%	83,500	22.1%
Common Stock, $78 par value	163,500	31.3%	163,500	36.7%	163,500	43.3%
Retained Earnings	131,100	25.1%	104,750	23.5%	79,250	21.0%
TOTAL LIABILITIES AND EQUITY	523,000	100.0%	445,000	100.0%	377,500	100.0%

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Requirement-2

To determine

To identify:

If the change in the Accounts Receivable is favorable and unfavorable

Requirement-2

Expert Solution

Answer to Problem 6E

The change in the Accounts Receivable is unfavorable.

Explanation of Solution

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

The Accounts receivables as % of total assets are showing an increasing trend over the years, hence the change in the Accounts Receivable is unfavorable.

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Requirement-3

To determine

To identify:

If the change in the Merchandise Inventory as % of Total Assets is favorable and unfavorable

Requirement-3

Expert Solution

Answer to Problem 6E

The change in the Merchandise Inventory as % of Total Assets is unfavorable.

Explanation of Solution

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

The Merchandise Inventory as % of total assets are showing an increasing trend over the years, hence the change in the Merchandise inventory is unfavorable.

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 17, Problem 6E

Requirement-1

To determine

To Calculate:

The Common Size percentages for the given balance sheets

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
Current Year (%) 1 Year ago (%) 2 Years ago (%)
ASSETS:
Cash
6.1%
8.0%
10.0%
Accounts Receivable, net
17.1%
14.0%
13.3%
Merchandise Inventory
21.5%
18.5%
14.3%
Prepaid Expenses
2.0%
2.1%
1.3%
Plant assets, net
53.3%
57.3%
61.1%
TOTAL ASSETS 100.0% 100.0% 100.0%
LIABILITIES AND EQUITY:
Accounts Payable
24.8%
16.9%
13.6%
Long Term Notes Payable
18.8%
22.8%
22.1%
Common Stock, $78 par value
31.3%
36.7%
43.3%
Retained Earnings
25.1%
23.5%
21.0%
TOTAL LIABILITIES AND EQUITY 100.0% 100.0% 100.0%

The Common Size percentages for the given balance sheets are calculated as follows:

Simon Company
Common Size Balance Sheet
Current Year ($) Current Year (%) 1 Year ago ($) 1 Year ago (%) 2 Years ago ($) 2 Years ago (%)
A B = A / 523000 C D = C/445000 C D = C/377500
ASSETS:
Cash
31,800
6.1%
35,625
8.0%
37,800
10.0%
Accounts Receivable, net
89,500
17.1%
62,500
14.0%
50,200
13.3%
Merchandise Inventory
112,500
21.5%
82,500
18.5%
54,000
14.3%
Prepaid Expenses
10,700
2.0%
9,375
2.1%
5,000
1.3%
Plant assets, net
278,500
53.3%
255,000
57.3%
230,500
61.1%
TOTAL ASSETS 523,000 100.0% 445,000 100.0% 377,500 100.0%
LIABILITIES AND EQUITY:
Accounts Payable
129,900
24.8%
75,250
16.9%
51,250
13.6%
Long Term Notes Payable
98,500
18.8%
101,500
22.8%
83,500
22.1%
Common Stock, $78 par value
163,500
31.3%
163,500
36.7%
163,500
43.3%
Retained Earnings
131,100
25.1%
104,750
23.5%
79,250
21.0%
TOTAL LIABILITIES AND EQUITY 523,000 100.0% 445,000 100.0% 377,500 100.0%

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Requirement-1

Expert Solution

Answer to Problem 6E

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

Explanation of Solution

The Common Size percentages for the given balance sheets are calculated as follows:

Simon Company
Common Size Balance Sheet

	Current Year ($)	Current Year (%)	1 Year ago ($)	1 Year ago (%)	2 Years ago ($)	2 Years ago (%)
	A	B = A / 523000	C	D = C/445000	C	D = C/377500
ASSETS:
Cash	31,800	6.1%	35,625	8.0%	37,800	10.0%
Accounts Receivable, net	89,500	17.1%	62,500	14.0%	50,200	13.3%
Merchandise Inventory	112,500	21.5%	82,500	18.5%	54,000	14.3%
Prepaid Expenses	10,700	2.0%	9,375	2.1%	5,000	1.3%
Plant assets, net	278,500	53.3%	255,000	57.3%	230,500	61.1%
TOTAL ASSETS	523,000	100.0%	445,000	100.0%	377,500	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	129,900	24.8%	75,250	16.9%	51,250	13.6%
Long Term Notes Payable	98,500	18.8%	101,500	22.8%	83,500	22.1%
Common Stock, $78 par value	163,500	31.3%	163,500	36.7%	163,500	43.3%
Retained Earnings	131,100	25.1%	104,750	23.5%	79,250	21.0%
TOTAL LIABILITIES AND EQUITY	523,000	100.0%	445,000	100.0%	377,500	100.0%

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Requirement-2

To determine

To identify:

If the change in the Accounts Receivable is favorable and unfavorable

Requirement-2

Expert Solution

Answer to Problem 6E

The change in the Accounts Receivable is unfavorable.

Explanation of Solution

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

The Accounts receivables as % of total assets are showing an increasing trend over the years, hence the change in the Accounts Receivable is unfavorable.

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Requirement-3

To determine

To identify:

If the change in the Merchandise Inventory as % of Total Assets is favorable and unfavorable

Requirement-3

Expert Solution

Answer to Problem 6E

The change in the Merchandise Inventory as % of Total Assets is unfavorable.

Explanation of Solution

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

The Merchandise Inventory as % of total assets are showing an increasing trend over the years, hence the change in the Merchandise inventory is unfavorable.

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Answer 5

Chapter 17, Problem 6E

Requirement-1

To determine

To Calculate:

The Common Size percentages for the given balance sheets

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
Current Year (%) 1 Year ago (%) 2 Years ago (%)
ASSETS:
Cash
6.1%
8.0%
10.0%
Accounts Receivable, net
17.1%
14.0%
13.3%
Merchandise Inventory
21.5%
18.5%
14.3%
Prepaid Expenses
2.0%
2.1%
1.3%
Plant assets, net
53.3%
57.3%
61.1%
TOTAL ASSETS 100.0% 100.0% 100.0%
LIABILITIES AND EQUITY:
Accounts Payable
24.8%
16.9%
13.6%
Long Term Notes Payable
18.8%
22.8%
22.1%
Common Stock, $78 par value
31.3%
36.7%
43.3%
Retained Earnings
25.1%
23.5%
21.0%
TOTAL LIABILITIES AND EQUITY 100.0% 100.0% 100.0%

The Common Size percentages for the given balance sheets are calculated as follows:

Simon Company
Common Size Balance Sheet
Current Year ($) Current Year (%) 1 Year ago ($) 1 Year ago (%) 2 Years ago ($) 2 Years ago (%)
A B = A / 523000 C D = C/445000 C D = C/377500
ASSETS:
Cash
31,800
6.1%
35,625
8.0%
37,800
10.0%
Accounts Receivable, net
89,500
17.1%
62,500
14.0%
50,200
13.3%
Merchandise Inventory
112,500
21.5%
82,500
18.5%
54,000
14.3%
Prepaid Expenses
10,700
2.0%
9,375
2.1%
5,000
1.3%
Plant assets, net
278,500
53.3%
255,000
57.3%
230,500
61.1%
TOTAL ASSETS 523,000 100.0% 445,000 100.0% 377,500 100.0%
LIABILITIES AND EQUITY:
Accounts Payable
129,900
24.8%
75,250
16.9%
51,250
13.6%
Long Term Notes Payable
98,500
18.8%
101,500
22.8%
83,500
22.1%
Common Stock, $78 par value
163,500
31.3%
163,500
36.7%
163,500
43.3%
Retained Earnings
131,100
25.1%
104,750
23.5%
79,250
21.0%
TOTAL LIABILITIES AND EQUITY 523,000 100.0% 445,000 100.0% 377,500 100.0%

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Requirement-1

Expert Solution

Answer to Problem 6E

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

Explanation of Solution

The Common Size percentages for the given balance sheets are calculated as follows:

Simon Company
Common Size Balance Sheet

	Current Year ($)	Current Year (%)	1 Year ago ($)	1 Year ago (%)	2 Years ago ($)	2 Years ago (%)
	A	B = A / 523000	C	D = C/445000	C	D = C/377500
ASSETS:
Cash	31,800	6.1%	35,625	8.0%	37,800	10.0%
Accounts Receivable, net	89,500	17.1%	62,500	14.0%	50,200	13.3%
Merchandise Inventory	112,500	21.5%	82,500	18.5%	54,000	14.3%
Prepaid Expenses	10,700	2.0%	9,375	2.1%	5,000	1.3%
Plant assets, net	278,500	53.3%	255,000	57.3%	230,500	61.1%
TOTAL ASSETS	523,000	100.0%	445,000	100.0%	377,500	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	129,900	24.8%	75,250	16.9%	51,250	13.6%
Long Term Notes Payable	98,500	18.8%	101,500	22.8%	83,500	22.1%
Common Stock, $78 par value	163,500	31.3%	163,500	36.7%	163,500	43.3%
Retained Earnings	131,100	25.1%	104,750	23.5%	79,250	21.0%
TOTAL LIABILITIES AND EQUITY	523,000	100.0%	445,000	100.0%	377,500	100.0%

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Requirement-2

To determine

To identify:

If the change in the Accounts Receivable is favorable and unfavorable

Requirement-2

Expert Solution

Answer to Problem 6E

The change in the Accounts Receivable is unfavorable.

Explanation of Solution

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

The Accounts receivables as % of total assets are showing an increasing trend over the years, hence the change in the Accounts Receivable is unfavorable.

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Requirement-3

To determine

To identify:

If the change in the Merchandise Inventory as % of Total Assets is favorable and unfavorable

Requirement-3

Expert Solution

Answer to Problem 6E

The change in the Merchandise Inventory as % of Total Assets is unfavorable.

Explanation of Solution

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

The Merchandise Inventory as % of total assets are showing an increasing trend over the years, hence the change in the Merchandise inventory is unfavorable.

Answer 6

Chapter 17, Problem 6E

Requirement-1

To determine

To Calculate:

The Common Size percentages for the given balance sheets

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
Current Year (%) 1 Year ago (%) 2 Years ago (%)
ASSETS:
Cash
6.1%
8.0%
10.0%
Accounts Receivable, net
17.1%
14.0%
13.3%
Merchandise Inventory
21.5%
18.5%
14.3%
Prepaid Expenses
2.0%
2.1%
1.3%
Plant assets, net
53.3%
57.3%
61.1%
TOTAL ASSETS 100.0% 100.0% 100.0%
LIABILITIES AND EQUITY:
Accounts Payable
24.8%
16.9%
13.6%
Long Term Notes Payable
18.8%
22.8%
22.1%
Common Stock, $78 par value
31.3%
36.7%
43.3%
Retained Earnings
25.1%
23.5%
21.0%
TOTAL LIABILITIES AND EQUITY 100.0% 100.0% 100.0%

The Common Size percentages for the given balance sheets are calculated as follows:

Simon Company
Common Size Balance Sheet
Current Year ($) Current Year (%) 1 Year ago ($) 1 Year ago (%) 2 Years ago ($) 2 Years ago (%)
A B = A / 523000 C D = C/445000 C D = C/377500
ASSETS:
Cash
31,800
6.1%
35,625
8.0%
37,800
10.0%
Accounts Receivable, net
89,500
17.1%
62,500
14.0%
50,200
13.3%
Merchandise Inventory
112,500
21.5%
82,500
18.5%
54,000
14.3%
Prepaid Expenses
10,700
2.0%
9,375
2.1%
5,000
1.3%
Plant assets, net
278,500
53.3%
255,000
57.3%
230,500
61.1%
TOTAL ASSETS 523,000 100.0% 445,000 100.0% 377,500 100.0%
LIABILITIES AND EQUITY:
Accounts Payable
129,900
24.8%
75,250
16.9%
51,250
13.6%
Long Term Notes Payable
98,500
18.8%
101,500
22.8%
83,500
22.1%
Common Stock, $78 par value
163,500
31.3%
163,500
36.7%
163,500
43.3%
Retained Earnings
131,100
25.1%
104,750
23.5%
79,250
21.0%
TOTAL LIABILITIES AND EQUITY 523,000 100.0% 445,000 100.0% 377,500 100.0%

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Requirement-1

Expert Solution

Answer to Problem 6E

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

Explanation of Solution

The Common Size percentages for the given balance sheets are calculated as follows:

Simon Company
Common Size Balance Sheet

	Current Year ($)	Current Year (%)	1 Year ago ($)	1 Year ago (%)	2 Years ago ($)	2 Years ago (%)
	A	B = A / 523000	C	D = C/445000	C	D = C/377500
ASSETS:
Cash	31,800	6.1%	35,625	8.0%	37,800	10.0%
Accounts Receivable, net	89,500	17.1%	62,500	14.0%	50,200	13.3%
Merchandise Inventory	112,500	21.5%	82,500	18.5%	54,000	14.3%
Prepaid Expenses	10,700	2.0%	9,375	2.1%	5,000	1.3%
Plant assets, net	278,500	53.3%	255,000	57.3%	230,500	61.1%
TOTAL ASSETS	523,000	100.0%	445,000	100.0%	377,500	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	129,900	24.8%	75,250	16.9%	51,250	13.6%
Long Term Notes Payable	98,500	18.8%	101,500	22.8%	83,500	22.1%
Common Stock, $78 par value	163,500	31.3%	163,500	36.7%	163,500	43.3%
Retained Earnings	131,100	25.1%	104,750	23.5%	79,250	21.0%
TOTAL LIABILITIES AND EQUITY	523,000	100.0%	445,000	100.0%	377,500	100.0%

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Answer 7

Chapter 17, Problem 6E

Requirement-1

To determine

To Calculate:

The Common Size percentages for the given balance sheets

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
Current Year (%) 1 Year ago (%) 2 Years ago (%)
ASSETS:
Cash
6.1%
8.0%
10.0%
Accounts Receivable, net
17.1%
14.0%
13.3%
Merchandise Inventory
21.5%
18.5%
14.3%
Prepaid Expenses
2.0%
2.1%
1.3%
Plant assets, net
53.3%
57.3%
61.1%
TOTAL ASSETS 100.0% 100.0% 100.0%
LIABILITIES AND EQUITY:
Accounts Payable
24.8%
16.9%
13.6%
Long Term Notes Payable
18.8%
22.8%
22.1%
Common Stock, $78 par value
31.3%
36.7%
43.3%
Retained Earnings
25.1%
23.5%
21.0%
TOTAL LIABILITIES AND EQUITY 100.0% 100.0% 100.0%

The Common Size percentages for the given balance sheets are calculated as follows:

Simon Company
Common Size Balance Sheet
Current Year ($) Current Year (%) 1 Year ago ($) 1 Year ago (%) 2 Years ago ($) 2 Years ago (%)
A B = A / 523000 C D = C/445000 C D = C/377500
ASSETS:
Cash
31,800
6.1%
35,625
8.0%
37,800
10.0%
Accounts Receivable, net
89,500
17.1%
62,500
14.0%
50,200
13.3%
Merchandise Inventory
112,500
21.5%
82,500
18.5%
54,000
14.3%
Prepaid Expenses
10,700
2.0%
9,375
2.1%
5,000
1.3%
Plant assets, net
278,500
53.3%
255,000
57.3%
230,500
61.1%
TOTAL ASSETS 523,000 100.0% 445,000 100.0% 377,500 100.0%
LIABILITIES AND EQUITY:
Accounts Payable
129,900
24.8%
75,250
16.9%
51,250
13.6%
Long Term Notes Payable
98,500
18.8%
101,500
22.8%
83,500
22.1%
Common Stock, $78 par value
163,500
31.3%
163,500
36.7%
163,500
43.3%
Retained Earnings
131,100
25.1%
104,750
23.5%
79,250
21.0%
TOTAL LIABILITIES AND EQUITY 523,000 100.0% 445,000 100.0% 377,500 100.0%

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Answer 8

Requirement-1

Expert Solution

Answer to Problem 6E

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

Answer 9

Requirement-1

Expert Solution

Answer 10

Requirement-1

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

The Common Size percentages for the given balance sheets are calculated as follows:

Simon Company
Common Size Balance Sheet

	Current Year ($)	Current Year (%)	1 Year ago ($)	1 Year ago (%)	2 Years ago ($)	2 Years ago (%)
	A	B = A / 523000	C	D = C/445000	C	D = C/377500
ASSETS:
Cash	31,800	6.1%	35,625	8.0%	37,800	10.0%
Accounts Receivable, net	89,500	17.1%	62,500	14.0%	50,200	13.3%
Merchandise Inventory	112,500	21.5%	82,500	18.5%	54,000	14.3%
Prepaid Expenses	10,700	2.0%	9,375	2.1%	5,000	1.3%
Plant assets, net	278,500	53.3%	255,000	57.3%	230,500	61.1%
TOTAL ASSETS	523,000	100.0%	445,000	100.0%	377,500	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	129,900	24.8%	75,250	16.9%	51,250	13.6%
Long Term Notes Payable	98,500	18.8%	101,500	22.8%	83,500	22.1%
Common Stock, $78 par value	163,500	31.3%	163,500	36.7%	163,500	43.3%
Retained Earnings	131,100	25.1%	104,750	23.5%	79,250	21.0%
TOTAL LIABILITIES AND EQUITY	523,000	100.0%	445,000	100.0%	377,500	100.0%

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Answer 13

Requirement-2

To determine

To identify:

If the change in the Accounts Receivable is favorable and unfavorable

Requirement-2

Expert Solution

Answer to Problem 6E

The change in the Accounts Receivable is unfavorable.

Explanation of Solution

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

The Accounts receivables as % of total assets are showing an increasing trend over the years, hence the change in the Accounts Receivable is unfavorable.

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Answer 14

Requirement-2

To determine

To identify:

If the change in the Accounts Receivable is favorable and unfavorable

Answer 15

Requirement-2

Expert Solution

Answer to Problem 6E

The change in the Accounts Receivable is unfavorable.

Answer 16

Requirement-2

Expert Solution

Answer 17

Requirement-2

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

The Accounts receivables as % of total assets are showing an increasing trend over the years, hence the change in the Accounts Receivable is unfavorable.

Concept Introduction:

Common Size Financial Statement:

Common Size Analysis is prepared as % format which shows readymade analysis for the financial statements. For the Income statement the common size format shows all the amounts as a % of sales revenue and for the Balance sheet the common size format shows the each items of the balance sheet as a % of the Total assets amount.

Answer 20

Requirement-3

To determine

To identify:

If the change in the Merchandise Inventory as % of Total Assets is favorable and unfavorable

Requirement-3

Expert Solution

Answer to Problem 6E

The change in the Merchandise Inventory as % of Total Assets is unfavorable.

Explanation of Solution

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

The Merchandise Inventory as % of total assets are showing an increasing trend over the years, hence the change in the Merchandise inventory is unfavorable.

Answer 21

Requirement-3

To determine

To identify:

If the change in the Merchandise Inventory as % of Total Assets is favorable and unfavorable

Answer 22

Requirement-3

Expert Solution

Answer to Problem 6E

The change in the Merchandise Inventory as % of Total Assets is unfavorable.

Answer 23

Requirement-3

Expert Solution

Answer 24

Requirement-3

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

The Common Size percentages for the given balance sheets are as follows:

Simon Company
Common Size Balance Sheet
	Current Year (%)	1 Year ago (%)	2 Years ago (%)
ASSETS:
Cash	6.1%	8.0%	10.0%
Accounts Receivable, net	17.1%	14.0%	13.3%
Merchandise Inventory	21.5%	18.5%	14.3%
Prepaid Expenses	2.0%	2.1%	1.3%
Plant assets, net	53.3%	57.3%	61.1%
TOTAL ASSETS	100.0%	100.0%	100.0%

LIABILITIES AND EQUITY:
Accounts Payable	24.8%	16.9%	13.6%
Long Term Notes Payable	18.8%	22.8%	22.1%
Common Stock, $78 par value	31.3%	36.7%	43.3%
Retained Earnings	25.1%	23.5%	21.0%
TOTAL LIABILITIES AND EQUITY	100.0%	100.0%	100.0%

The Merchandise Inventory as % of total assets are showing an increasing trend over the years, hence the change in the Merchandise inventory is unfavorable.

Answer 27

Ch. 17 - Prob. 1DQ Ch. 17 - Prob. 2DQ Ch. 17 - Prob. 3DQ Ch. 17 - 4. What three factors would influence your...Ch. 17 - Prob. 5DQ Ch. 17 - Prob. 6DQ Ch. 17 - Prob. 7DQ Ch. 17 - Prob. 8DQ Ch. 17 - Prob. 9DQ Ch. 17 - Prob. 10DQ

Concept explainers

Videos

Answer to Problem 6E

Explanation of Solution

To identify:

If the change in the Accounts Receivable is favorable and unfavorable

Answer to Problem 6E

Explanation of Solution

To identify:

If the change in the Merchandise Inventory as % of Total Assets is favorable and unfavorable

Answer to Problem 6E

Explanation of Solution

Want to see more full solutions like this?

Chapter 17 Solutions

Concept explainers

Videos

Answer to Problem 6E

Explanation of Solution

To identify: If the change in the Accounts Receivable is favorable and unfavorable

Answer to Problem 6E

Explanation of Solution

To identify: If the change in the Merchandise Inventory as % of Total Assets is favorable and unfavorable

Answer to Problem 6E

Explanation of Solution

Want to see more full solutions like this?

Chapter 17 Solutions

To identify:

If the change in the Accounts Receivable is favorable and unfavorable

To identify:

If the change in the Merchandise Inventory as % of Total Assets is favorable and unfavorable