Complete this question by entering your answers in the tabs below.Required 1ARequired 1BRequired 2ARequired 2BCompute the current ratio for each of the three years.Current RatioChoose Numerator:I Choose Denominator:Current RatioCurrent assetsI Current liabilitiesCurrent ratio%3DCurrent Yr:0 to 1%3D1 Yr Ago:0 to 1%3D2 Yrs Ago:0 to 1< Required 1ARequired 1B > Simon Company's year-end balance sheets follow.At December 31Current Yr1 Yr Ago2 Yrs AgoAssets$ 25,49429,800 $52,67669,6087,901216,273Cash$Accounts receivable, netMerchandise inventoryPrepaid expensesPlant assets, net73,88891,9628,459236,65630,73740,57742,7783,348189,960Total assets$ 436,459$ 376, 258 $ 307,400Liabilities and Equity$ 106,50564, 223 $ 40,577Accounts payableLong-term notes payable secured bymortgages on plant assetsCommon stock, $10 par valueRetained earnings$83,69568,615162,50035,708$ 376, 258 $ 307,40089,136162,500162,50083,75960,399Total liabilities and equity$ 436,459(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?

The question is based on the concept of Accounting Ratios.

Simon Company's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets $ 29,800 $ 30,737 $ 25,494 73,888 91,962 8,459 236,656 Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net 52,676 69,608 7,901 216, 273 40,577 42,778 3,348 189,960 Total assets $ 436,459 $ 376,258 $ 307,400 Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings $ 106,505 $ 64, 223 $ 40,577 83,695 162,500 89,136 162,500 60,399 68,615 162,500 35,708 83,759 Total liabilities and equity $ 436,459 $ 376,258 $ 307,400

Simon Company's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets $ 29,800 $ 30,737 $ 25,494 73,888 91,962 8,459 236,656 Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net 52,676 69,608 7,901 216, 273 40,577 42,778 3,348 189,960 Total assets $ 436,459 $ 376,258 $ 307,400 Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings $ 106,505 $ 64, 223 $ 40,577 83,695 162,500 89,136 162,500 60,399 68,615 162,500 35,708 83,759 Total liabilities and equity $ 436,459 $ 376,258 $ 307,400

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter16: Financial Statements And Closing Entries For A Corporation

Section: Chapter Questions

Problem 1MP

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