Simon Companys yearend balance sheets follow 2017 At Decembe

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

Solution

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