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Exercise 13-4 Computing and interpreting common-size percents LO P2 Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Reason for Income Decline in Net Statement Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year % % Sales $ 655,000 297,600 Cost of goods sold Gross profit Operating expenses $ 790,000 568,100 221,900 129,200 $ 92,700 357,400 266,000 $ 91,400 Net income Exercise 13-7 Analyzing liquidity LO P3 Simon Company's year-end balance sheets follow. Current Yr 1 Yr Ago 2 Yrs Ago At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 26,701 79,782 100, 310 8,687 251,079 $ 466,559 $ 31,855 $ 33,182 55,746 43,809 74,408 48,061 8,531 3,542 231,666 200,006 $ 402,206 $ 328,600 $ 115,011 $ 66,613 $ 42,508 88,590 162,500 100, 458 $ 466,559 90,657 71,168 162,500 162,500 82,436 52,424 $ 402,206 $ 328,600 (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 current ratio for each of the three years. Current Ratio Choose Numerator: 1 Choose Denominator: Current Ratio Accounts receivable Current ratio I Accounts receivable, net 1 Current Yr: 1 1 Yr Ago: 2 Yrs Ago: 0 to 1 oto 1 0 to 1 Required 1A Required 1B > 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. Acid-test ratio Choose Numerator: | Choose Denominator: Acid-Test Ratio Cash + + Current receivables I Cost of goods sold Acid-test ratio + + / Current Yr: 1 Yr Ago: 2 Yrs Ago: 0 to 1 0 to 1 + + / + + / 0 to 1