Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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?

image text in transcribedimage text in transcribedimage text in transcribed

Required Information [The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. 1 Year Ago 2 Years Ago 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 $ 33,011 98,574 119,078 10,631 303,858 $ 565,152 $ 40,145 67,526 90,132 10,334 279,063 $ 487,200 $ 40,194 52,520 56,499 4,555 252,232 $ 406,000 $ 140,723 105,186 163,500 155,743 $ 565, 152 $ 83,984 112,056 162,500 128,660 $ 487,200 $ 51,984 90,623 163,500 99,893 $ 406,000 For both the current year and one year ago, compute the following ratios: Reg 1 Reg 2 and 3 Express the balance sheets in common-size percents. (Do not round intermediate calculations and round your final percentage answers to 1 decimal place.) SIMON COMPANY Common-Size Comparative Balance Sheets December 31 Current Year 1 Year Ago 2 Years Ago 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 Retained earnings Total liabilities and equity % % % % 6 % % Reg 1 Reg 2 and 3 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? Show less 2. Change in accounts receivable 3. Change in merchandise inventory

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Patient Centered Audit

Authors: Kruse

1st Edition

0875272479, 978-0875272474

More Books

Students also viewed these Accounting questions

Question

4.2 Choose a channel tailored to your audience and context?

Answered: 1 week ago