Question

Simon Company's year-end balance sheets follow.

At December 31	Current Yr				1 Yr Ago			2 Yrs Ago
Assets
Cash		$	38,250		$	43,408		$	43,896
Accounts receivable, net			106,555			76,724			56,789
Merchandise inventory			135,326			101,386			62,961
Prepaid expenses			11,959			11,737			4,926
Plant assets, net			337,331			309,349			270,428
Total assets		$	629,421		$	542,604		$	439,000
Liabilities and Equity
Accounts payable		$	161,428		$	91,700		$	57,369
Long-term notes payable secured by mortgages on plant assets			119,514			123,551			98,959
Common stock, $10 par value			163,500			163,500			163,500
Retained earnings			184,979			163,853			119,172
Total liabilities and equity		$	629,421		$	542,604		$	439,000

1. Express the balance sheets in common-size percents. (Do not round intermediate calculations and round your final percentage answers to 1 decimal place.)
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

Answer 1