Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Simon Companys year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 31,800 $ 35,625 $ 37,800

Simon Companys year-end balance sheets follow.

At December 31 Current Yr 1 Yr Ago 2 Yrs Ago
Assets
Cash $ 31,800 $ 35,625 $ 37,800
Accounts receivable, net 89,500 62,500 50,200
Merchandise inventory 112,500 82,500 54,000
Prepaid expenses 10,700 9,375 5,000
Plant assets, net 278,500 255,000 230,500
Total assets $ 523,000 $ 445,000 $ 377,500
Liabilities and Equity
Accounts payable $ 129,900 $ 75,250 $ 51,250
Long-term notes payable secured by mortgages on plant assets 98,500 101,500 83,500
Common stock, $10 par value 163,500 163,500 163,500
Retained earnings 131,100 104,750 79,250
Total liabilities and equity $ 523,000 $ 445,000 $ 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?

Complete this question by entering your answers in the tabs below.

  • Req 1
  • Req 2 and 3

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 secured by mortgages on plant assets
Common stock, $10 par
Retained earnings
Total liabilities and equity % % %

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?

Show less

2. Change in accounts receivable
3. Change in merchandise inventory

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Finance Text And Cases

Authors: Vishwanath S. R.

3rd Edition

9353282896, 978-9353282899

More Books

Students also viewed these Accounting questions

Question

What do you like most about planning/strategy development?

Answered: 1 week ago