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Required information (The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. Current Year 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 $ 35,463 99,699 127,937 11,420 326,547 $ 601,066 $ 41,453 72,542 93,942 10,881 299,342 $ 518,168 $ 43,683 55,858 61,929 4,702 265,708 $ 431,800 $19,708 ON $ 154, 155 114,130 163,500 169,281 $ 601,066 $ 85,818 117,985 163,500 150,857 $518,160 94,474 163,500 115, 118 $ 431,800 For both the current year and one year ago, compute the following ratios: 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? Required information 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 % % % % % % % % %