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 Total liabilities and equity Retained earnings Current Year 1 Year Ago 2 Years Ago $ 31,800 89,500 112,500 10,700 278,500 $ 523,000 $ 129,900 98,500 163,500 131, 100 $ 523,000 $ 35,625 62,500 $ 37,800 50,200 82,500 9,375 255,000 $ 445,000 $ 75,250 101,500 163,500 104, 750 $ 445,000 For both the current year and one year ago, compute the following ratios: Exercise 17-6 (Static) Common-size percents LO P2 1. Express the balance sheets in common-size percents. 54,000 5,000 230, 500 $ 377,500 $ 51,250 83,500 163,500 79,250 $ 377,500 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 Express the balance sheets in common-size percents. Note: Do not round intermediate calculations and round your final percentage answer 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 Reg % % % % % % % % % 906 % % 906 % Req 2 and 3 > 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? 2. Change in accounts receivable 3. Change in merchandise inventory Show less A