Answered step by step
Verified Expert Solution
Question
1 Approved Answer
[The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Current Year 1 Year Ago 2 Years
[The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow.
At December 31 | Current Year | 1 Year Ago | 2 Years Ago |
---|---|---|---|
Assets | |||
Cash | $ 32,657 | $ 37,410 | $ 38,976 |
Accounts receivable, net | 94,650 | 64,799 | 50,929 |
Merchandise inventory | 116,625 | 90,041 | 56,464 |
Prepaid expenses | 10,727 | 9,920 | 4,417 |
Plant assets, net | 298,851 | 274,994 | 242,914 |
Total assets | $ 553,510 | $ 477,164 | $ 393,700 |
Liabilities and Equity | |||
Accounts payable | $ 140,580 | $ 79,028 | $ 53,527 |
Long-term notes payable | 106,141 | 109,748 | 86,138 |
Common stock, $10 par value | 162,500 | 162,500 | 163,500 |
Retained earnings | 144,289 | 125,888 | 90,535 |
Total liabilities and equity | $ 553,510 | $ 477,164 | $ 393,700 |
(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?
! Required information [The following information applies to the questions displayed below. Simon Company's year-end balance sheets follow. Current Year 1 Year Ago 2 Years Ago 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 Retained earnings Total liabilities and equity $ 32,657 94,650 116,625 10,727 298,851 $ 553,510 $ 37,410 64,799 90,041 9,920 274,994 $ 477, 164 $ 38,976 50,929 56, 464 4,417 242,914 $ 393,700 $ 140,580 106, 141 162,500 144,289 $ 553,510 $ 79,028 109,748 162,500 125,888 $ 477,164 $ 53,527 86,138 163,500 90, 535 $ 393,700 (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? Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2A Required 2B Compute the current ratio for each of the three years. Current Ratio Denominator: Numerator: 1 = Current Ratio Current ratio = to 1 Current Year: 1 Year Ago: 2 Years Ago: to 1 1 to 1 Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2A Required 2B Did the current ratio improve or worsen over the three-year period? Current ratio Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2A Required 2B Compute the acid-test r Required 1B the three years. Acid-test ratio Numerator: 1 Denominator: = Acid-Test Ratio + Short-term investments + 1 = Acid-test ratio Current Year: + + 1 = to 1 + + 1 = to 1 1 Year Ago: 2 Years Ago: + + + 1 to 1 Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2A Required 2B Did the acid-test ratio improve or worsen over the three-year period? Acid-test ratioStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started