Exercise 13-7 Analyzing liquidity LO P3 Simon Company's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 25,219 74,569 90,043 8,450 233,477 $ 431,758 $ 29,776 $ 29,795 53,151 70,235 8,051 210,992 $ 372,205 $ 307, 100 Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net 40,132 43,608 3,479 190,086 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 $ 61,016 $ 40,943 $ 106,433 65, 833 162,500 37,824 81,982 162,500 80,843 $ 431,758 83,039 162,500 65,650 $ 372,205 $ 307,100 (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three year period? Complete this question by entering your answers in the tabs below. Required 1B Required 2A Required 28 Required 1A Compute the current ratio for each of the three years. Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three year period? Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1A Required 18 Required 2A Required 28 Compute the current ratio for each of the three years. Current Ratio Choose Numerator: Accounts receivable Current Ratio Choose Denominator: Current ratio to Current Yr: %3D to 1 Yr Ago: to 2 Yrs Ago: Required 18 Saved Help Save & $ 431,758 $ 372,205 $ 307, 100 Total assets Liabilities and Equity Accounts payable Long-tern notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings $ 106,433 $ 61,016 $ 40,943 83,039 162,500 65,650 $ 372,205 $ 307, 100 65,833 81,982 162,500 37,824 162,500 80,843 $ 431,758 Total liabilities and equity (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three year period? Complete this question by entering your answers in the tabs below. Required 28 Required 1A Required 18 Required 2A Compute the acid-test ratio for each of the three years. Acid-test ratio = Acid-Test Ratio I Choose Denominator: Choose Numerator: Acid-test ratio O to 1 Oto 1 0 to 1 Current Yr: 1 Yr Ago: 2 Yrs Ago: Required 28
