[The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. Current Year 1 Year Ago 2 Years Ago At December 31 Assets Cash $ 31,800 Accounts receivable, net $ 35,625 62,500 Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable 89,500 112,500 10,700 278,500 98,500 $ 523,000 $ 129,900 Long-term notes payable Common stock, $10 par value Total liabilities and equity Retained earnings 82,500 9,375 255,000 $ 445,000 $ 75,250 101,500 163,500 104,750 163,500 131,100 $ 523,000 $ 445,000 For both the current year and one year ago, compute the following ratios: $ 37,800 50,200 54,000 5,000 230,500 $ 377,500 $ 51,250 83,500 163,500 79,250 $ 377,500 Compute the current ratio for each of the three years. Did the current ratio improve or worsen over the three-year period? Compute the acid-test ratio for each of the three years. Did the acid-test ratio improve or worsen over the three-year period? omplete this question by entering your answers in the tabs below.
[The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. Current Year 1 Year Ago 2 Years Ago At December 31 Assets Cash $ 31,800 Accounts receivable, net $ 35,625 62,500 Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable 89,500 112,500 10,700 278,500 98,500 $ 523,000 $ 129,900 Long-term notes payable Common stock, $10 par value Total liabilities and equity Retained earnings 82,500 9,375 255,000 $ 445,000 $ 75,250 101,500 163,500 104,750 163,500 131,100 $ 523,000 $ 445,000 For both the current year and one year ago, compute the following ratios: $ 37,800 50,200 54,000 5,000 230,500 $ 377,500 $ 51,250 83,500 163,500 79,250 $ 377,500 Compute the current ratio for each of the three years. Did the current ratio improve or worsen over the three-year period? Compute the acid-test ratio for each of the three years. Did the acid-test ratio improve or worsen over the three-year period? omplete this question by entering your answers in the tabs below.
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 56P: The following selected information is taken from the financial statements of Arnn Company for its...
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![Required information
[The following information applies to the questions displayed below.]
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
Liabilities and Equity
Accounts payable
Current Year 1 Year Ago 2 Years Ago
$ 35,625
62,500
$ 37,800
50,200
$ 31,800
89,500
112,500
10,700
278,500
98,500
$ 523,000
$ 129,900
Long-term notes payable
Common stock, $10 par value
Retained earnings
Total liabilities and equity
82,500
9,375
255,000
$ 445,000
$ 75,250
101,500
163,500
104,750
163,500
131,100
$ 523,000
$ 445,000
For both the current year and one year ago, compute the following ratios:
54,000
5,000
230,500
$ 377,500
$ 51,250
83,500
163,500
79,250
$ 377,500
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 acid-test ratio for each of the three years.
2-b) Did the acid-test ratio improve or worsen over the three-year period?
Complete this question by entering your answers in the tabs below.
Required 1A Required 1B Required 2A Required 2B
Compute the acid-test ratio for each of the three years.
Numerator:
+Short-term investments
Current Year:
1 Year Ago:
+
2 Years Ago:
+
Acid-Test Ratio
Denominator:
Acid-Test Ratio
=
Acid-test ratio
+
0 to 1
+
0 to 1
=
0 to 1
< Required 1B
Required 2B >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa0c39f24-9385-4182-933c-081dee5097c2%2F8eaa516c-b00c-4cd8-b966-9b6c7ec94f6a%2Fheroyni_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
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
Liabilities and Equity
Accounts payable
Current Year 1 Year Ago 2 Years Ago
$ 35,625
62,500
$ 37,800
50,200
$ 31,800
89,500
112,500
10,700
278,500
98,500
$ 523,000
$ 129,900
Long-term notes payable
Common stock, $10 par value
Retained earnings
Total liabilities and equity
82,500
9,375
255,000
$ 445,000
$ 75,250
101,500
163,500
104,750
163,500
131,100
$ 523,000
$ 445,000
For both the current year and one year ago, compute the following ratios:
54,000
5,000
230,500
$ 377,500
$ 51,250
83,500
163,500
79,250
$ 377,500
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 acid-test ratio for each of the three years.
2-b) Did the acid-test ratio improve or worsen over the three-year period?
Complete this question by entering your answers in the tabs below.
Required 1A Required 1B Required 2A Required 2B
Compute the acid-test ratio for each of the three years.
Numerator:
+Short-term investments
Current Year:
1 Year Ago:
+
2 Years Ago:
+
Acid-Test Ratio
Denominator:
Acid-Test Ratio
=
Acid-test ratio
+
0 to 1
+
0 to 1
=
0 to 1
< Required 1B
Required 2B >
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