H&R Block, Inc. is a well-known income tax services firm. Information for 2005 and 2004 from the
Question:
Student A: What a great year H&R Block had in 2005! The company earned income of $306,551,000 because total assets increased from $5,232,732,000 to $5,539,283,000.
Student B: But it didn't do that well because the change in total assets isn't the same as net income! Its net income was only $27,468,000 because its cash increased from $1,072,745,000 to $1,100,213,000.
Student C: I see from the annual report that H&R Block paid $142,988,000 in the form of dividends to its owners in 2005. Don't you have to consider that when analyzing a company's performance?
1. Comment on the interpretations of Students A and B, and then answer Student C's question?
2. Calculate H&R Block's net income for 2005?
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Related Book For
Principles of Accounting
ISBN: 978-0618736614
10th edition
Authors: Belverd Needles, Marian Powers, Susan Crosson
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