Required information [The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Assets Current Year 1 Year Ago 2 Years Ago Cash Accounts receivable, net $ 31,800 89,500 $ 35,625 62,500 $ 37,800 50,200 Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable 112,500 10,700 278,500 82,500 9,375 255,000 $ 523,000 $ 445,000 $ 129,900 Long-term notes payable Common stock, $10 par value 98,500 163,500 131,100 Total liabilities and equity $ 523,000 $ 445,000 Retained earnings $ 75,250 101,500 163,500 104,750 For both the current year and one year ago, compute the following ratios: 54,000 5,000 230,500 $ 377,500 $ 51,250 83,500 163,500 79,250 $ 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? Express the balance sheets in common-size percents. (Do not round intermediate calculations and round your final percentage answers to 1 decimal place.) SIMON COMPANY 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 % % %