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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
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 secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity Current Yr $ 31,800 $ 89,500 112,500 10,700 278,500 $ 523,000 $ 129,900 1 Yr Ago 2 Yrs Ago 35,625 $ 62,500 37,800 50, 200 82,500 98,500 163,500 131, 100 54,000 5,000 230,500 $ 445,000 $ 377,500 9,375 255,000 $ 75,250 $ 101,500 163,500 104,750 $ 523,000 $ 445,000 $ 377,500 51, 250 (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? 83,500 163,500 79, 250
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Solution 1a Current Ratio Current Year Current Ratio Current Assets Current Liabilities Current Ratio 31800 89500 112500 10700 278500 Current Ratio 044 1 Year Ago Current Ratio 35625 62500 82500 9375 ...Get Instant Access to Expert-Tailored Solutions
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