Exercise 13-6 Common-size percents LO P2 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 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 Current Yr $ 31,800 89, 500 112,500 10, 700 278,500 $ 523,000 1 Yr Ago 2 Yrs Ago S 37,800 $ 35,625 62, 500 82,500 9, 375 255, 000 50, 200 54,000 5,000 230, 500 $ 377.500 $ 445,000 $ 129,900 $ 75, 250 $ 51, 250 98,500 163, 500 131, 100 $ 523,000 101,500 83,500 163, 500 163,500 104, 750 79,250 $ 445.000 $ 377,500 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?