Simon Company's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 33,325 $ 40,941 $ 41,409 Accounts receivable, net 95,601 68,169 55,770 Merchandise inventory 123,917 93,757 59,995 Prepaid expenses 11,170 10,643 4,555 Plant assets, net 312,345 283,350 260,771 Total assets $ 576,358 $ 496,860 $ 422,500 Liabilities and Equity Accounts payable $ 143,513 $ 82,290 $ 55,212 Long-term notes payable secured by mortgages on plant assets 111,606 111,992 92,439 Common stock, $10 par value 163,500 163,500 163,500 Retained earnings 157,739 139,078 111,349 Total liabilities and equity $ 576,358 $ 496,860 $ 422,500 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's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 33,325 $ 40,941 $ 41,409 Accounts receivable, net 95,601 68,169 55,770 Merchandise inventory 123,917 93,757 59,995 Prepaid expenses 11,170 10,643 4,555 Plant assets, net 312,345 283,350 260,771 Total assets $ 576,358 $ 496,860 $ 422,500 Liabilities and Equity Accounts payable $ 143,513 $ 82,290 $ 55,212 Long-term notes payable secured by mortgages on plant assets 111,606 111,992 92,439 Common stock, $10 par value 163,500 163,500 163,500 Retained earnings 157,739 139,078 111,349 Total liabilities and equity $ 576,358 $ 496,860 $ 422,500 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?
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 14BEA: Last year, Nikkola Company had net sales of 2.299.500,000 and cost of goods sold of 1,755,000,000....
Related questions
Question
Simon Company's year-end balance sheets follow.
At December 31 | Current Yr | 1 Yr Ago | 2 Yrs Ago | |||||||
Assets | ||||||||||
Cash | $ | 33,325 | $ | 40,941 | $ | 41,409 | ||||
Accounts receivable, net | 95,601 | 68,169 | 55,770 | |||||||
Merchandise inventory | 123,917 | 93,757 | 59,995 | |||||||
Prepaid expenses | 11,170 | 10,643 | 4,555 | |||||||
Plant assets, net | 312,345 | 283,350 | 260,771 | |||||||
Total assets | $ | 576,358 | $ | 496,860 | $ | 422,500 | ||||
Liabilities and Equity | ||||||||||
Accounts payable | $ | 143,513 | $ | 82,290 | $ | 55,212 | ||||
Long-term notes payable secured by mortgages on plant assets |
111,606 | 111,992 | 92,439 | |||||||
Common stock, $10 par value | 163,500 | 163,500 | 163,500 | |||||||
Retained earnings | 157,739 | 139,078 | 111,349 | |||||||
Total liabilities and equity | $ | 576,358 | $ | 496,860 | $ | 422,500 | ||||
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?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning