Question
Simon Company's year-end balance sheets follow. At December 31 Current Year 1 Year Ago 2 Years Ago Assets Cash $ 34,258 $ 38,855 $ 39,283
Simon Company's year-end balance sheets follow.
At December 31 | Current Year | 1 Year Ago | 2 Years Ago |
Assets | |||
Cash | $ 34,258 | $ 38,855 | $ 39,283 |
Accounts receivable, net | 95,358 | 70,771 | 52,912 |
Merchandise inventory | 119,894 | 93,519 | 56,346 |
Prepaid expenses | 10,705 | 10,720 | 4,543 |
Plant assets, net | 314,679 | 281,733 | 251,816 |
Total assets | $ 574,894 | $ 495,598 | $ 404,900 |
Liabilities and Equity | |||
Accounts payable | $ 146,012 | $ 82,081 | $ 53,447 |
Long-term notes payable | 111,322 | 113,988 | 88,588 |
Common stock, $10 par value | 162,500 | 162,500 | 162,500 |
Retained earnings | 155,060 | 137,029 | 100,365 |
Total liabilities and equity | $ 574,894 | $ 495,598 | $ 404,900 |
For both the current year and one year ago, compute the following ratios:
Exercise 13-6 (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?
Complete this question by entering your answers in the tabs below.
Express the balance sheets in common-size percents. (Do not round intermediate calculations and round your final percentage answers to 1 decimal place.)
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Step by Step Solution
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There are 3 Steps involved in it
Step: 1
To calculate the commonsize percents for the balance sheets we need to express each asset liability and equity item as a percentage of the total assets or total liabilities and equity respectively Com...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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