In: Accounting
Simon Company's year-end balance sheets follow.
At December 31 | Current Yr | 1 Yr Ago | 2 Yrs Ago | |||||||
Assets | ||||||||||
Cash | $ | 36,631 | $ | 42,399 | $ | 43,291 | ||||
Accounts receivable, net | 105,128 | 72,729 | 57,138 | |||||||
Merchandise inventory | 130,870 | 98,048 | 63,976 | |||||||
Prepaid expenses | 11,681 | 11,240 | 4,810 | |||||||
Plant assets, net | 324,388 | 300,324 | 272,485 | |||||||
Total assets | $ | 608,698 | $ | 524,740 | $ | 441,700 | ||||
Liabilities and Equity | ||||||||||
Accounts payable | $ | 147,019 | $ | 91,341 | $ | 57,138 | ||||
Long-term notes
payable secured by mortgages on plant assets |
116,724 | 124,311 | 100,544 | |||||||
Common stock, $10 par value | 163,500 | 163,500 | 163,500 | |||||||
Retained earnings | 181,455 | 145,588 | 120,518 | |||||||
Total liabilities and equity | $ | 608,698 | $ | 524,740 | $ | 441,700 | ||||
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?