Simon Company's year-end balance sheets follow.
| At December31 | Current Yr | 1Yr Ago | 2Yrs Ago |
| Assets | | | | | | | | | | |
| Cash | | $ | 31,077 | | $ | 36,326 | | $ | 35,635 | |
| Accountsreceivable, net | | | 88,304 | | | 62,324 | | | 48,968 | |
| Merchandiseinventory | | | 109,915 | | | 83,180 | | | 53,200 | |
| Prepaidexpenses | | | 10,008 | | | 9,629 | | | 4,000 | |
| Plant assets,net | | | 277,091 | | | 253,709 | | | 225,497 | |
| Totalassets | | $ | 516,395 | | $ | 445,168 | | $ | 367,300 | |
| Liabilities and Equity | | | | | | | | | | |
| Accountspayable | | $ | 128,582 | | $ | 76,738 | | $ | 47,514 | |
Long-term notespayable secured by
mortgages on plant assets | | | 96,111 | | | 105,460 | | | 80,362 | |
| Common stock,$10 par value | | | 163,500 | | | 163,500 | | | 163,500 | |
| Retainedearnings | | | 128,202 | | | 99,470 | | | 75,924 | |
| Totalliabilities and equity | | $ | 516,395 | | $ | 445,168 | | $ | 367,300 | |
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1. Express the balance sheets in common-sizepercents. (Do not round intermediate calculations and roundyour final percentage answers to 1 decimal place.)
2. Assuming annual sales have not changed in thelast three years, is the change in accounts receivable as apercentage of total assets favorable or unfavorable?
3. Assuming annual sales have not changed in thelast three years, is the change in merchandise inventory as apercentage of total assets favorable or unfavorable?
