Question

Simon Company's year end balance sheets follow Current Yr 1 Yr Ago 2 Yrs Ago 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 secured by mortgages on plant assets Common stock, 310 par value Retained earnings Total liabilities and equity $ 31,800 89,500 112,500 10,700 278,500 $ 523,000 $ 35,625 $ 37,800 62,500 50,200 82,500 54,000 9,375 5,000 255,000 230, 500 $445,000 5 377,500 $ 129,900 $ 75,250 $ 51,250 98,500 163,500 131, 100 $ 523,000 101,500 83,500 163,500 163,500 104.750 79,250 5445,000 5 377,500 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? Complete this question by entering your answers in the tabs below.

Answer 1

SIMON COMPANY Common Size Comparative Balance Sheet Decemer 31 Current YR 1 Yr Ago 2 Yrs Ago Assets cash 6.1% 8.0% 10.0% Accounts Receiables ,net 17.1% 14.0% 13.3% Merchadise inventory 21.5% 18.5% 14.3% Prepaid Expenses 2.0% 2.1% 1.3% Plant Asset ,Net 53.3% 57.3% 61.1% Total assets 100.0% 100.0% 100.0% Liabilities and Equity Account Payables 24.8% 16.9% 13.6% Lon-term note Paaybles 18.8% 22.8% 22.1% Common Stock $10 Each 31.3% 36.7% 43.3% Retained Earnings 25.1% 23.5% 21.0% Total Liabilites and Equity 100.0% 100.0% 100.0% Common size balance Sheet the Statement which contains the proportion of each element with the Total Asest Percent = Amount of Item / Total Assets Change in the Accounts receivables as a % of Total Assets for the Last three Years Change in Account Receivables UnFavorable Change in the Invenotry as a% Of Total Assets for the Last three Years Change in Invenotry Unfavorable