Exercise 13-6 Common-size percents LO P2 Simon Company's year-end balance sheets follow. Current Yr 1 Yr Ago 2 Yrs Ago $ 26,620 77,152 97,004 8,572 246,393 $ 455,741 $ 31,430$ 56,103 72,683 8,003 224,661 $ 392,880 32,088 44,513 47,886 3,493 199,420 327,400 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 $ 112,345 65,733 $ 41,920 85,679 163,500 94,217 $ 455,741 91,266 73,079 163,500 163,500 72,381 48,901 $ 392,880 $ 327,400 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? 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. $10 par Retained earnings Total liabilities and equity % % %