Required information [The following information applies to the questions displayed below.) 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 Common stock, $10 par value Retained earnings Total liabilities and equity Current Year 1 Year Ago 2 Years Ago $ 32,159 $ 36,103 92,285 64,482 113,710 10,049 291,475 $539,678 $ 135,724 100,445 163,500 85,209 10,063 269,383 $465,240 $ 38,382 52,712 53,952 4,265 238,389 $ 387,700 $51,176 83,111 $ 77,839 103,795 162,500 163,500 140,009 $539,678 121,106 $465,240 89,913 $387,700 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? Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses SIMON COMPANY Common-Size Comparative Balance Sheets December 31 Current Year 1 Year Ago 2 Years Ago 32,159.0% 36,103.0 % 38,382.0% Plant assets, net Total assets % % % Liabilities and Equity Accounts payable % % % Long-term notes payable Common stock, $10 par Retained earnings Total liabilities and equity % % % Reg 2 and 3 > Req 1 Req 2 and 3 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? 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? 2. Change in accounts receivable 3. Change in merchandise inventory Show less A