Group B P1-64B. (Learning Objectives 3, 4: Apply the accounting equation; evalua

Question

Group B P1-64B. (Learning Objectives 3, 4: Apply the accounting equation; evaluate business operations) Compute the missing amount (?) for each company-amounts in millions Pearl Co Loomis Co. Bryant Corp eginning Assets S 82 $42 20 10 20 4 Ending S 19 Assets Liabilities Common stock Retained earnings. $62 46 3 37 Income statement S223 216 S 26 Expenses 160 Statement of retained earnings S 35 S20 10 (16) S14 Beginning RE + Net income -Ending RE 37 $ 3 Which company has the highest net income? highest percent of net income to revenues?

Explanation / Answer

Statement of Retained Earings

INCOME STATEMENT

For PERL CO.

For LOOMIS CO.

For BRYANT CO.

Accounting Equation

FOR PERL CO

Beginning

Ending

FOR LOOMIS CO

Ending

FOR BRAYANT CO

Beginning

Ending

Highest Net Income

Hence we can say that Loomis Co having highest Net income as well as highest % of net income to revenues.

Particulars Pearl Co Loomis Co Brayant Co Ending RF $37 $14 $3 + Divided Declared $5 $16 $2 - Beginning RF ($35) ($20) ($4) Net Income $7 $10 $1

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