Simon ompany\'s year-end baiance sheets tollow At December 31 Assets Cash Accoun

Question

Simon ompany's year-end baiance sheets tollow At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets 2817 2816 2815 S 29,226 35,198 35,939 47,918 59,538 3,876 272,64242,971217,629 $ 500,367 431,351 $ 355,98e 83,852 185,427 e, 222 62,281 82,194 8,787 Liabilities and Equity Accounts payable Long-term notes payable secured by 123,345 73,627 46,509 mortgages on plant assets Common stock, $19 par value Retained earnings Total liabilities and equity 93,128 97,227 78,654 5 162,see 97,99268,237 509,367 431,351 355,988 162,see 162, 121,394 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 3 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the acid-test ratio for the years ended December 31, 2017, 2016, and 2015. Acid-Test Choose Numerator: Choose Current receivablesCurment liablities Acid-test ratio Cash 05.427 3+ 82.184 3 0.538 23,345.77 o 47.9180|-13.75 | 46.500?-1280 Ito 20.220 2017 2016 2015 83.852 2.201 47.018 35.108 Prey 1 of 1 ext

Explanation / Answer

Current Ratio = Current Assets / current Liabilities

2015 = cash + accountsreceivable + Merchandise inventory + Prepaid Expenses / Accounts payable

= $35,939 + 47,918 + 50,538 + 3,876 / 46,509

= 2.97

2016 = cash + accountsreceivable + Merchandise inventory + Prepaid Expenses / Accounts payable

= 35,198+62,201+82,194+8,787 / 73,627

= 2.55

2017 =   cash + accountsreceivable + Merchandise inventory + Prepaid Expenses / Accounts payable

= 29226+83852+105427+9222/123345

= 1.84

Acid Test Ratio = Cash + Accounts receivable + short term Investments / Current Liabilities

2015 = Cash + Accounts receivable + short term Investments / Current Liabilities

= 35939 + 47918 / 83857

= 1.80

2016 =  Cash + Accounts receivable + short term Investments / Current Liabilities

= 35198 + 62201 / 73627

= 1.322

2017 =  Cash + Accounts receivable + short term Investments / Current Liabilities

= 29226 + 83852 / 123345

= 0.92

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