Use the following information for the Exercises below. (Algo) [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 Accounts payable Current Year 1 Year Ago 2 Years Ago $ 32,093 92,067 118,144 $ 38,280 66,320 $ 37,913 10,441 302,313 90,293 10,048 273,557 $ 478,498 $ 555,058 $ 136,827 Long-term notes payable 103,307 Common stock, $10 par value Retained earnings 162,500 152,424 $ 78,440 111,155 163,500 125,403 Total liabilities and equity $ 555,058 $ 478,498 For both the current year and one year ago, compute the following ratios: 51,592 56,062 4,386 244,847 $ 394,800 $ 51,592 84,633 162,500 96,075 $ 394,800 Exercise 17-6 (Algo) Common-size percents LO P2 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? Assets Cash SIMON COMPANY Common-Size Comparative Balance Sheets December 31 Current Year 1 Year Ago 2 Years Ago Accounts receivable, net Merchandise inventory 6.0 % % % 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 % % % 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 < Req 1 Req 2 and 3> Show less