SIMON COMPANY Common-Size Comparative Balance Sheets December 31 Current Year 1 Year Ago 2 Years Ago Assets Cash Accounts receivable, net 31 Merchandise inventory 32 Prepaid expenses 33 Plant assets, net 34 Total assets 35 Uabilities and Equity 36 Accounts payable 37 Long-term notes payable 38 Common stock, \$10 par 39 Retained earnings 40. Total liabilities and equity 41. 42. 2. Assuming annual sales have not changed in the last three years, is the change in accounts receivable as a percentage of total 43 assets favorable or unfavorable? 44 3. Assuming annual sales have not changed in the last three vears, is the change in merchandise inventory as a percentage of total 45 assets favorable or unfavorable? 4647484950 Simon Company's year-end balance sheets follow. \begin{tabular}{|l|r|r|r|} \hline At December 31 & Current Year & 1 Year Ago & 2 Years Ago \\ \hline Assets & & & \\ \hline Cash & $31,800 & $35,625 & $37,800 \\ \hline Accounts receivable, net & 89,500 & 62,500 & 50,200 \\ \hline Merchandise inventory & 112,500 & 82,500 & 54,000 \\ \hline Prepaid expenses & 10,700 & 9,375 & 5,000 \\ \hline Plant assets, net & 278,500 & 255,000 & 230,500 \\ \hline Total assets & $523,000 & $445,000 & $377,500 \\ \hline Uabilities and Equity & & & \\ \hline Accounts payable & $129,900 & $75,250 & $51,250 \\ \hline Long-term notes payable & 98,500 & 101,500 & 83,500 \\ \hline Common stock, $10 par value & 163,500 & 163,500 & 163,500 \\ \hline Retained earnings & 131,100 & 104,750 & 79,250 \\ \hline Total liabilities and equity & $523,000 & $445,000 & $377,500 \\ \hline \end{tabular} 18 Required: 20 1. Express the balance sheets in common-size percents. 21 22. (Use cells A4 to D17 from the given information to complete this question.) 23 SIMON COMPANY Common-Size Comparative Balance Sheets December 31 Current Year I Year Aso 2 Years Aso Assets Cash Accounts receivable, net Merchandise inventory 32 Prepaid expenses 33 plantassets, net