Simon Company’s year-end balance sheets follow. At December 31201720162015Assets         Cash$31,800 $35,625 $37,800 Accounts receivable, net 89,500  62,500  50,200 Merchandise inventory 112,500  82,500  54,000 Prepaid expenses 10,700  9,375  5,000 Plant assets, net 278,500  255,000  230,500 Total assets$523,000 $445,000 $377,500 Liabilities and Equity         Accounts payable$129,900 $75,250 $51,250 Long-term notes payable secured bymortgages on plant assets 98,500  101,500  83,500 Common stock, $10 par value 163,500  163,500  163,500 Retained earnings 131,100  104,750  79,250 Total liabilities and equity$523,000 $445,000 $377,500   1. Compute the current ratio for the year ended 2017, 2016, and 2015.2. Compute the acid-test ratio for the year ended 2017, 2016, and 2015.

Question
Asked Mar 11, 2019

Simon Company’s year-end balance sheets follow.
 

At December 31 2017 2016 2015
Assets                  
Cash $ 31,800   $ 35,625   $ 37,800  
Accounts receivable, net   89,500     62,500     50,200  
Merchandise inventory   112,500     82,500     54,000  
Prepaid expenses   10,700     9,375     5,000  
Plant assets, net   278,500     255,000     230,500  
Total assets $ 523,000   $ 445,000   $ 377,500  
Liabilities and Equity                  
Accounts payable $ 129,900   $ 75,250   $ 51,250  
Long-term notes payable secured by
mortgages on plant assets
  98,500     101,500     83,500  
Common stock, $10 par value   163,500     163,500     163,500  
Retained earnings   131,100     104,750     79,250  
Total liabilities and equity $ 523,000   $ 445,000   $ 377,500  
 

 
1. Compute the current ratio for the year ended 2017, 2016, and 2015.
2. Compute the acid-test ratio for the year ended 2017, 2016, and 2015.
 

 
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Expert Answer

Step 1

1. Calculate the current ratio of Simon Company for the year ended 2017, 2016 and 2015:

 

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Step 2

2. Calculate the acid test ratio of Simon Company the ...

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