Che Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Income Statement Reason for Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) the GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year $ % $ Sales $ 795,000 $ 690,000 Cost of goods sold 568,100 286,600 Gross profit 226,900 403,400 Operating expenses 130,400 266,000 Net income $ 96,500 $ 137,400 Simon Company's year-end balance sheets follow. Check Current Yr 1 Yr Ago 2 Yrs 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 secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 35, 503 98,863 129,375 11,433 314,770 $589,944 $ 41,906 $ 40,723 71,209 56,491 92,204 60,181 19,894 4,616 292,368 253,489 $ 508,572 $ 415,500 $ 149,834 $ 83,370 $ 53,749 112,019 163,500 164,591 $ 589,944 114,632 91,826 163,5ee 163,500 147,070 106,425 $ 508,572 $ 415,5ee 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? Ow/connect.html 3 Exercise Saved 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 secured by mortgages on plant assets Common stock, S10 par Retained earnings Total liabilities and equity Req 2 and 3 >