4. Assume that Tardis' 2020 Total Assets increase by 2.5% and that Net Income also increases by...
Question:
4. Assume that Tardis' 2020 Total Assets increase by 2.5% and that Net Income also increases by 2.5%. Current Liabilities, Long Term Debt and Common Stock do not change, however Retained Earnings will increase by the proportion of Net Income that is retained by the company as Retained Earnings that you found in question 3. Now add up 2020 Current Liabilities, Long Term Debt, Common Stock and Retained Earnings and subtract that from 2020 total Assets. Which is larger, Total Assets or Total Liabilities and Owner's Equity? What is the size of the difference? 5. Repeat problem 4 using 6.0% as the increase in 2020 Total Assets and Net Income.6. Repeat problem 4 using 10% as the increase in 2020 Total Assets and Net Income.
Financial Reporting Financial Statement Analysis and Valuation
ISBN: 978-0324302950
6th edition
Authors: Clyde P. Stickney