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.
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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