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 $ 27,731 81,202 $ 33,418 59,650 $ 35,496 103,138 9,022 263,462 88,363 77,278 9,035 238,339 $ 417,720 45,490 50,419 3,753 212,942 $ 348,100 $ 45,949 77,699 162,500 61,952 162,500 109,418 $ 69,183 97,036 162,500 89,001 $ 484,555 $ 417,720 $ 348,100 Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity $ 484,555 Accounts payable $ 124,274 Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity For both the current year and one year ago, compute the following ratios: 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 [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 $ 27,731 81,202 $ 33,418 59,650 $ 35,496 103,138 9,022 263,462 88,363 77,278 9,035 238,339 $ 417,720 45,490 50,419 3,753 212,942 $ 348,100 $ 45,949 77,699 162,500 61,952 162,500 109,418 $ 69,183 97,036 162,500 89,001 $ 484,555 $ 417,720 $ 348,100 Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity $ 484,555 Accounts payable $ 124,274 Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity For both the current year and one year ago, compute the following ratios: 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?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Required information [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 Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity Current Year Interest expense Income tax expense Total costs and expenses Net income Earnings per share $ 26,605 89, 200 114,500 8,568 221, 258 $ 460,131 $ 112,281 84,775 162,500 100,575 1 Year Ago $ 65,696 89,408 162,500 79,061 $ 460, 131 $ 396,665 Current Year $ 31,099 62,900 85,000 8,163 209,503 $ 396,665 $364,884 185,433 10,169 7,776 The company's income statements for the current year and one year ago follow. Assume that all sales are on credit: For Year Ended December 31 Sales Cost of goods sold Other operating expenses $ 598,170 2 Years Ago $ 32,725 50,800 58,000 3,636 192, 139 $…