Simon Company\'s year-end balance sheets follow 2017 At December 31 Assets Cash

Question

Simon Company's year-end balance sheets follow 2017 At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets 42,732 45,041 3,525 203,976 $459,736 396,324 327,000 77,043 100,820 8,997 $ 27,396 31,706$31,726 56,040 71,854 8,323 245,480 228,401 Liabilities and Equity Accounts payable Long-term notes payable secured by $ 113,330 64,969$ 42,301 90,243 162,500 162,500 162,500 78,612 84,702 71,544 mortgages on plant assets Common stock, Retained earnings $10 par value 50,655 $459,736 396,324 327,000 99,204 Total liabilities and equity 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

Explanation / Answer

1) Current ratio :

2) Acid test ratio :

Current assets / Current liabilities = Current ratio 2017 214256 / 113330 = 1.89:1 2016 167923 / 64969 = 2.58:1 2015 123024 / 42301 = 2.91:1

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