[The following information applies to the questions displayed below.] 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 Current Yr 1 Yr Ago 2 Yrs Ago $ 31,800 89,500 112,500 $ 35,625 $ 37,800 62,500 50,200 82,500 54,000 9,375 5,000 255,000 230,500 10,700. 278,500 $ 523,000 $ 445,000 $ 377,500 Accounts payable $ 129,900 $ 75,250 $ 51,250 Long-term notes payable 98,500 101,500 83,500 Common stock, $10 par value 163,500 163,500 163,500 Retained earnings Total liabilities and equity 131,100 $ 523,000 104,750 79,250 $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? Required information Assets SIMON COMPANY Common-Size Comparative Balance Sheets December 31 Current Year 1 Year Ago 2 Years Ago 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 % % % % % % % % % % Required information 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? 2. Change in accounts receivable 3. Change in merchandise inventory Show less A