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 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

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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