Question

Simon Company's year-end balance sheets follow.

At December 31	Current Yr				1 Yr Ago			2 Yrs Ago
Assets
Cash		$	30,940		$	37,251		$	36,927
Accounts receivable, net			91,467			62,025			48,251
Merchandise inventory			110,493			85,307			54,555
Prepaid expenses			9,764			9,399			4,103
Plant assets, net			281,744			258,094			229,164
Total assets		$	524,408		$	452,076		$	373,000
Liabilities and Equity
Accounts payable		$	131,883		$	76,401		$	50,221
Long-term notes payable secured by mortgages on plant assets			100,560			106,057			81,609
Common stock, $10 par value			163,500			163,500			163,500
Retained earnings			128,465			106,118			77,670
Total liabilities and equity		$	524,408		$	452,076		$	373,000

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?

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 % % %

Answer 1