Question: Required information Use the following information for the Exercises below. (Static) Skip to question [The following information applies to the questions displayed below.] Simon Companys
Required information
Use the following information for the Exercises below. (Static)
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[The following information applies to the questions displayed below.] Simon Companys year-end balance sheets follow.
| At December 31 | Current Yr | 1 Yr Ago | 2 Yrs Ago | ||||||||
| 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 | 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 | |||||
Exercise 13-7 Analyzing liquidity LO P3
(1-a) Compute the current ratio for each of the three years.
Compute the current ratio for each of the three years.
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(1-b) Did the current ratio improve or worsen over the three-year period?
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(2-a) Compute the acid-test ratio for each of the three years.
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(2-b) Did the acid-test ratio improve or worsen over the three-year period?
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