Simon Company's year-end balance sheets follow.At December 31AssetsCashAccounts receivable, netMerchandise inventoryPrepaid expensesPlant assets, netTotal assetsCurrent Year:1 Year Ago:2 Years Ago:Required 1A Required 18Liabilities and EquityAccounts payableLong-term notes payable.Common stock, $10 par valueRetained earningsTotal liabilities and equityFor both the current year and one year ago, compute the following ratios:Required 1A Required 1B Required 2ACompute the current ratio for each of the three years.Current RatioNumerator:Current assetsCurrent Year:1 Year Ago:2 Years Ago:Compute the quick ratio for each of the three years.Current Year(1-a) Compute the current ratio for each of the three years.(1-b) Did the current ratio improve or worsen over the three-year period?(2-a) Compute the quick ratio for each of the three years.(2-b) Did the quick ratio improve or1$ 25,41172,89894,4908,517238,174$ 439,490Required 2A Required 28$ 111,62282,624163,50081,744$439,490Required 2BNumerator:Short-term investmentsover the three-year period?Denominator:Current liabilities< Required 1A1 Year Ago$ 30,31052,512Acid-test ratio71,4937,877216,679$ 378,871< Required 18$ 65,31086,269163,50063,792$ 378,871=Required 1B >2 Years Ago$ 31,87640,85145,7213,507190,645$312,600$ 41,26368,394163,50039,443$ 312,600Current RatioCurrent ratio0 to 10.00 to 10 to 1Required 2B>Denominator:= AcidAcic

The current ratio indicates the liquidity of the company, it is used to evaluate whether the company…

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 Current Year $ 25,411 72,898 94,490 8,517 238,174 $ 439,490 1 Year Ago $ 111,622 82,624 163,500 81,744 $ 439,490 $ 30,310 52,512 71,493 7,877 216,679 $378,871 Liabilities and Equity Accounts payable 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: $ 65,310 86,269 163,500 63,792 $ 378,871 (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 quick ratio for each of the three years. (2-b) Did the quick ratio improve or worsen over the three-year period? 2 Years Ago $ 31,876 40,851 45,721 3,507 190,645 $ 312,600 $ 41,263 68,394 163,500 39,443 $ 312,600

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 Current Year $ 25,411 72,898 94,490 8,517 238,174 $ 439,490 1 Year Ago $ 111,622 82,624 163,500 81,744 $ 439,490 $ 30,310 52,512 71,493 7,877 216,679 $378,871 Liabilities and Equity Accounts payable 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: $ 65,310 86,269 163,500 63,792 $ 378,871 (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 quick ratio for each of the three years. (2-b) Did the quick ratio improve or worsen over the three-year period? 2 Years Ago $ 31,876 40,851 45,721 3,507 190,645 $ 312,600 $ 41,263 68,394 163,500 39,443 $ 312,600

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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The financial statements of New World, Incorporated, provide the following information for the current year: December 31 January 1 Accounts receivable $ 288,000 $ 391,500 Inventory $ 281,250 $ 267,000 Prepaid expenses $ 73,200 $ 70,500 Accounts payable (for merchandise) $ 259,800 $ 251,550 Accrued expenses payable $ 66,150 $ 79,950 Net sales $ 3,172,500 Cost of goods sold $ 1,672,500 Operating expenses (including depreciation of $64,000) $ 382,500 What is New World's net cash flow from operating activities for the current year?
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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 $ 32,700 $ 37,849 $ 37,130 Accounts receivable, net 94,775 65,580 51,527 Merchandise inventory 120,330 86,659 53,800 Prepaid expenses 10,118 10,034 4,252 Plant assets, net 285,450 268,303 235,991 Total assets $ 543,373 $ 468,425 $ 382,700 Liabilities and Equity Accounts payable $ 138,006 $ 78,372 $ 51,022 Long-term notes payable 100,111 107,738 83,731 Common stock, $10 par value 163,500 163,500 162,500 Retained earnings 141,756 118,815 85,447 Total liabilities and equity $ 543,373 $ 468,425 $ 382,700 The company’s income statements for the current year and 1 year ago, follow. For Year Ended December 31 Current Year 1 Year Ago Sales $ 706,385 $ 557,426 Cost of goods sold $ 430,895 $ 362,327 Other operating expenses 218,979 141,029 Interest…
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