Required information

Skip to question

$[$The following information applies to the questions displayed below.$]$

Simon Company$$s year$-$end balance sheets follow.

At December $31$ Current Year $1$ Year Ago $2$ Years Ago

Assets

Cash $ $31,800$ $ $35,625$ $ $37,800$

Accounts receivable, net $89,50062,50050,200$

Merchandise inventory $112,50082,50054,000$

Prepaid expenses $10,7009,3755,000$

Plant assets, net $278,500255,000230,500$

Total assets $ $523,000$ $ $445,000$ $ $377,500$

Liabilities and Equity

Accounts payable $ $129,900$ $ $75,250$ $ $51,250$

Long$-$term notes payable $98,500101,50083,500$

Common stock, $$10$ par value $163,500163,500163,500$

Retained earnings $131,100104,75079,250$

Total liabilities and equity $ $523,000$ $ $445,000$ $ $377,500$

For both the current year and one year ago, compute the following ratios:

$(1-$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?Required information

$($The following information applies to the questions displayed below.$]$

Simon Company's year$-$end balance sheets follow.

For both the current year and one year ago, compute the following ratios:

$1-0)$ Compute the current ratio for each of the three years

$1-$b$)$ Cid the current ratio improve or warsen over the three$-$year period?

$2-$o$)$ Compute the acid$-$test ratio for each of the three years

$2-$b$)$ Did the acidsest ratis impreve or worsen ovet the threeyear period?

Cemplete this question by entering wour answers in the tabs below.