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Financial Accounting, 9th Edition Solution Manual

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    Chapter 1 The Financial Statements 1 - 1 Chapter 1 The Financial Statements Short Exercises (5 min.) S 1 - 1 Computed amounts in boxes Total Assets = Total Liabilities + Stockholders’ Equity a. $300,000 = $150,000 + $150,000 b. 280,000 = 110,000 + 170,000 c. 210,000 = 50,000 + 160,000 (5 min.) S 1 - 2 Ethics is a factor that should be included in every business and accounting decision, beyond the potential economic and legal consequences. Ideally, for each decision, honesty and truthfulness should prevail, considering the rights of others. The decision guidelines at the end of the chapter spell out the considerations we should take when making decisions. Simply, we might ask ourselves three questions: (1) is the action legal? (2) Who will be affected by the decision? (3) How will the decision make me feel afterward?

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    Financial Accounting 9/e Solutions Manual 1 - 2 (10 min.) S 1 - 3 a. Corporation, Limited - liability partnership (LLP) and Limited - liability company (LLC). If any of these businesses fails and cannot pay its liabilities, creditors cannot force the owners to pay the business’s debts from the owners’ personal assets. b. Proprietorship . There is a single owner of the business, so the owner is answerable to no other owner. c. Partnership . If the partnership fails and cannot pay its liabilities, creditors can force the partners to pay the business’s debts from their personal assets. A partnership affords more protection for creditors than a proprietorship because there are two or more owners to share this liability. (5 min.) S 1 - 4 1. The entity assumption applies. 2. Application of the entity assumption will separate Newberry’s personal assets from the assets of Healthy Food Brands. This will help Newberry, investors, and lenders know how much assets , liabilities and equity the business has, and this knowledge will help all parties evaluate the business realistically. (5 - 10 min.) S 1 - 5 a. Historical cost principle b. Stable - monetary - unit assumption c. Entity assumption d. Historical cost principle

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    Chapter 1 The Financial Statements 1 - 3 (5 min.) S 1 - 6 1. Owners’ Eq uity = Assets − Liabilities This way of determining the amount of owners’ equity applies to any company, your household, or a single IHOP restaurant. 2. Liabilities = Assets − Owners’ Equity (5 min.) S 1 - 7 1. Assets are the economic resources of a busi ness that are expected to produce a benefit in the future. Owners’ equity represents the insider claims of a business, the owners’ interest in its assets. Assets and owners’ equity differ in that assets are resources and owners’ equity is a claim to assets . Assets must be at least as large as owners’ equity, so equity can be smaller than assets. 2. Both liabilities and owners’ equity are claims to assets . Liabilities are the outsider claims to the assets of a business; they are obligations to pay creditors. Owners’ equity represents the insider claims to the assets of the business; they are the owners’ interest in its assets. (5 - 10 min.) S 1 - 8 a. Accounts payable L g. Accounts receivable A b. Common stock S h. Long - term debt L c. Supplies A i. Merchandise inventory A d. Retained earnings S j. Notes payable L e. Land A k. Accrued expenses payable L f. Prepaid expenses A l. Equipment A

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    Financial Accounting 9/e Solutions Manual 1 - 4 (5 min.) S 1 - 9 1. Revenues and expenses 2. Net income (or net loss) (5 min.) S 1 - 10 Split Second Wireless, Inc. Income Statement Year Ended December 31, 2012 (millions) Revenues…………………………………….. $ 97 Expenses…………………………………….. 26 Net income…………………………………... $ 71 (5 min.) S 1 - 11 CellPhone Corp. Statement of Retained Earnings Year Ended December 31, 2012 (millions) Retained earnings, December 31, 2011……. $290 Add: Net income ($360 − $250)…….………. 110 Less: Dividends………………………............. (44 ) Retained earnings, December 31, 2012…… . $356

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    Chapter 1 The Financial Statements 1 - 5 (10 min.) S 1 - 12 Landy Products Balance Sheet December 31, 2012 ASSETS Current assets: Cash ................................ ................................ ..... $ 12,000 Receivables ................................ .......................... 8,000 Inv entory ................................ .............................. 44,000 T otal current assets ................................ ............. 64,000 Equipment………………………………………………. 88,000 Total assets…………………………………………….. $152,000 LIABILITIES Current liabilities: Accounts payable…………………………………… $ 13,000 Total current liabilities……………………………... 13,000 Long - term liabilities: Long - term notes payable………………………….. 80,000 Total liabilities………………………………………... .. 93,000 STOCKHOLDERS’ EQUITY Common stock…………………………………………. 15,300 Retained earnings……………………………………… 43,700 * To tal stockholders’ equity………………………… 59,000 Total liabilities and stockholders’ equity………….. $152,000 _____ *Computation of retained earnings: Total assets ($152,000) − current liabilities ($13,000) − long - term notes payable ($80,000) − common stock ($15,300) = $43,700

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    Financial Accounting 9/e Solutions Manual 1 - 6 (10 - 15 min.) S 1 - 13 Yidas Medical, Inc. Statement of Cash Flows Year Ended December 31, 2012 Cash flows from operating activities: Net income………………………………………... .. $ 80,000 Adjustments to reconcile net income to net cash provided by operating activities… ………. (11,000 ) Net cash provided by operating activities 69,000 Cash flows from investing activities: Purchases of equipment……………… . $(32,000 ) Net cash u sed for investing activities …. (32,000) Cash flows from financing activities: Payment of dividends………………… $(25,000 ) Net cash used for financing activities… .. (25,000 ) Net increase in cash………………… .... …………… 12,000 Cash balance, December 31, 2011. .. ……………… 30,000 Cash balance, December 31, 2012………………… $ 42,000

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    Chapter 1 The Financial Statements 1 - 7 (10 min.) S 1 - 14 a. Dividends SRE, SCF b. Salary expense IS c. Inventory BS d. Sales revenue IS e. Retained earnings SRE, BS f. Net cash provided by operating activities SCF g. Net income IS, SRE, SCF h. Cash BS, SCF i. Net cash used for financing activities SCF j. Accounts payable BS k. Common stock BS l. Interest revenue IS m. Long - term debt BS n. Increase or decrease in cash SCF (15 - 20 min.) S 1 - 15 a. Paying large dividends will cause retained earnings to be low. b. Heavy investing activity and paying off debts can result in a cash shortage even if net income has been high. c. The single best source of cash for a business is collections from customers. This source of cash is best because it results from the core operations of the business. d. Borrowing, issuing stock, and selling land, buildings, and equipment can bring in cash even when the company has experienced losses. Reducing accounts receivable and inventory can also increase cash flow.

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    Financial Accounting 9/e Solutions Manual 1 - 8 Exercises (10 - 15 min.) E 1 - 16A Amounts in billions ; (computed amounts in boxes) Assets = Liabilities + Owners’ Equity Perfect Cleaners $33 $ 15 $18 Ernie’s Bank 35 13 22 Hudson Gift and Cards 27 17 10 Ernie’s Bank appears to have the strongest financial position because its liabilities make up the smallest percentage of company assets ($13/$35 = .37). Stated differently, Ernie’s Bank’s equity is the highest percentage of company assets ($22 / $35 = .63). (10 - 15 min.) E 1 - 17A Req. 1 (Amounts in millions) Assets = Liabilities + Stockholders’ Equity $280 $170 430 300 170 Total $880 = $470 + $410 Req. 2 Resources to work with Req. 3 Amount owed to creditors Req. 4 Actually owned by company stockholders

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    Chapter 1 The Financial Statements 1 - 9 ( 10 - 20 min.) E 1 - 18A Situation 1 2 3 Millions Total stockholders’ equity, January 31, 2012 ($28 − $5)………… … $23 $23 $23 Add: Issuances of stock…………………… … 1 - 0 - 33 Net income………………………………. . 7 12* - 0 - L ess: Dividends………………………….......... . - 0 - (4) (8) Net loss…………………………………… - 0 - * - 0 - (17)* Total stockholders’ equity, January 31, 2013 ($48 − $17)…………. . $31 $31 $31 _____ *Must solve for these amounts. (10 - 15 min.) E 1 - 19A 1. Diamond, Inc. Assets = Liabilities + Stockholders’ Equity Beginning amount $130,000 = $95,000 + $35,000 Multiplier for incre ase × 1. 05 Ending amount $136,500 2. NorthWest Airlines, Ltd. Assets − Liabilities = Stockholders’ Equity Beginning amount $100,000 − $52,000 = $48,000 Net income 27,000 Ending amount $75,000

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    Financial Accounting 9/e Solutions Manual 1 - 10 (10 - 15 min.) E 1 - 20A a. Balance sheet b. Balance sheet c. Statement of retained earnings, Statement of cash flows d. Income statement e. Balance sheet, Statement of retained earnings f. Balance sheet g. Balance sheet h. Income statement i. Statement of cash flows j. Income statement k. Statement of cash flows l. Balance sheet, Statement of cash flows m. Balance sheet n. Income statement, Statement of retained earnings, Statement of cash flows

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    Chapter 1 The Financial Statements 1 - 11 (10 - 20 min.) E 1 - 21A Mary Burke Banking Company Balance Sheet ( Amounts in millions ) August 31, 2012 ASSETS LIABILITIES Cash $ 2.8 Current liabilities $155.4 Receivables 0.3 Long - term liabilities 2.6 Investment assets 169.3 Total liabilities 158.0 Property and equipment, net 1.6 STOCKHOLDERS’ EQUITY Other assets 14.2 Common stock 14.2 Retained earnings 16.0* Total stockholders’ equity 30.2 Total liabilities and Total assets $188.2 stockholders’ equity $188.2 _____ *Computation of retained ear nings: Total assets ($188.2) − Total liabilities ($158.0) − Common stock ($14.2) = $16.0

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    Financial Accounting 9/e Solutions Manual 1 - 12 (15 - 25 min.) E 1 - 22A Req. 1 Mary Burke Banking Company Income Statement ( Amounts in millions ) Year Ended August 31, 2012 Total revenue……………………………………… … $31.4 Expenses: Salary and other employee expenses.…… ….. $ 17.4 Other expenses………………………………… ... 6.6 Interest expense..……………………………… … 0.1 Total expenses………………………………… …. 24.1 Net income…………………………………………… . $ 7.3 Req. 2 The statement of retained earnings helps to compute dividends, as follows: Mary Burke Banking Company Statement of Retained Earnings Year Ended August 3, 2012 ( Amounts in millions ) Retained earnings, beginning of year…………………….. $9.3 Add: Net income for the year ( Req. 1 )…………………….. 7.3 16.6 Less: Dividends…………………………………………......... 0.6 Retained earnings, end of year (from Exercise 1 - 21A)…. $16.0

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    Chapter 1 The Financial Statements 1 - 13 (15 - 20 min.) E 1 - 23A Glass, Inc. Statement of Cash Flows Year Ended December 31, 2012 Cash flows from operating activities: Net income………………… ………………………… $430,000 Adjustments to reconcile net income to net cash provided by operating activities…… ....... 75,000 Net cash provided by operating activities… …….. $505,000 Cash flows from investing activities: Net cash used for investing activities………… … .. (420,000) Cash flows from financing activities: Net cash provided by financing activities…… ....... 11,000 Net increase in cash………………………… ...................... 96,000 Beginning cash balance…………………… ....................... 83,000 Ending cash balance……………………………… .............. $179,000 Items given that do not appear on the statement of cash flows: Total assets − Balance sheet Total liabilities − Balance sheet

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    Financial Accounting 9/e Solutions Manual 1 - 14 (15 - 20 min.) E 1 - 24A Dogan Copy Center, Inc. Income Statement For the Month Ended July 31, 2012 Revenue: Service revenue………… ................ $540,200 Expenses: Salary expense……………………… $160,000 Utiliti es expense….………………… . 10,500 Rent expense………………………… 2,700 Total expenses…………………… …. 173,200 Net income……………………………… ….. $ 367,000 Dogan Copy Center, Inc. Statement of Retained Earnings For the Month Ended July 31, 2012 Retained earnings, July 1, 2012…………………… . $ - 0 - Add: Net income …………… ……….……………… . 367,000 367,000 Less: Dividends………………………….…………… (4,700 ) Retained earnings, July 31, 2012…….…………… . $362,300

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    Chapter 1 The Financial Statements 1 - 15 (15 - 20 min.) E 1 - 25A Dogan Copy Center, Inc. Balance Sheet July 31, 2012 Assets Liabilities Cash…………… .. $ 10,300 Accounts payable…………… $ 17,400 Office supplies… 14,700 Equipment……… 460,000 Stockholders’ Equity Common stock……………… . 105,300 Retained earnings…………… 362,300 Total stockholders’ equity… . 467,600 Total assets…… . $ 48 5,000 Total liabilities and stockholders’ equity ……... $485,000

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    Financial Accounting 9/e Solutions Manual 1 - 16 (15 - 20 min.) E 1 - 26A Dogan Copy Center, Inc. Statement of Cash Flows For the Month Ended July 31, 2012 Cash flows from operating activities: Net income………………………………………… … $ 367,000 Adjustments to reconcile net income to net cash provided by operations…………………… 2,700 Net cash provided by operating activities 369,700 Cash flows from investing activities: Acquisition of equipment ................................ $(460,000 ) Net cash used for investing activities ..... (460,000) Cash flows from financing activities: Issuance (sale) of stock to owners……… ...... $ 105,300 Payment of dividends……………………… ...... (4,700 ) Net cash provided by financing activities 100,600 Net increase in cash……………………… ............. 10,300 Cash balance, July 1, 2012…………………… ...... 0 Cash balance, July 31, 2012……………… ........... $ 10,300

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    Chapter 1 The Financial Statements 1 - 17 (10 - 15 min.) E 1 - 27A TO: Owner of Dogan Copy Center, Inc. FROM: Student Name SUBJECT: Opinion of net income, dividends, financial position, and cash flows Your first month of operations was successful. Revenues totaled $540,200 and net income was $367,000. These operating results look very strong. The company was able to pay a $4,700 dividend, and this should make you happy with so quick a return on your investment. Your financial position looks secure, with assets of $48 5,000 and liabilities of only $17,400. Your stockholders’ equity is $467,600. Operating activities generated cash of $369,700, which is respectable. You ended the month with cash of $10,300. Based on the above facts, I believe you should stay in business. Student responses may vary. (10 - 15 min.) E 1 - 28B Amounts in billions; (computed amounts in boxes) Assets = Liabilities + Owners’ Equity Fresh Produce $37 $ 20 $17 Margie’s Bank 30 $18 12 Flowers and Gifts 21 6 $15 Flowers and Gifts appears to have the strongest financial position because its liabilities make up the smallest percentage of company assets ($6/$21 = .29). Stated differently, Flowers and Gifts’ equity is the highest pe rcentage of company assets ($15/ $21 = .71).

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    Financial Accounting 9/e Solutions Manual 1 - 18 (10 - 15 min.) E 1 - 29B Req. 1 (Amounts in millions) Assets = Liabilities + Stockholders’ Equity $270 $160 400 340 160 Total $830 = $500 + $330 Req. 2 Resources to work with Req. 3 Amount owed to creditors Req. 4 Actually owned by company stockholders 10 - 20 min.) E 1 - 30B Situation 1 2 3 Millions Total stockholders’ equity, Janu ary 31, 2012 ($31 − $7)…………. $24 $24 $24 Add: Issuances of stock…………………… 4 - 0 - 10 Net income…………………………….. 0 3* 39 Less: Dividends…………………………........ - 0 - (4) (50) Net loss…………………………………. (5)* - 0 - - 0 - * Total stockholders’ equity, January 31, 2013 ($35 − $12)………… $23 $23 $23 _____ *Must solve for these amounts.

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    Chapter 1 The Financial Statements 1 - 19 (10 - 15 min.) E 1 - 31B 1. Emerald, Inc. Assets = Liabilities + Stockholders’ Equity Beginning amount $160,000 = $80,000 + $80,000 Multiplier for incre ase × 1. 25 Ending amount $200,000 2. JetWest Airlines, Ltd. Assets − Liabilities = Stockholders’ Equity Beginning amount $130,000 − $37,000 = $93,000 Net income 28,000 Ending amount $121,000 (10 - 15 min.) E 1 - 32B a. Income statement b. Income statement, Statement of retained earnings, Statement of cash flows c. Balance sheet d. Balance sheet e. Balance sheet f. Balance sheet, Statement of retained earnings g. Income statement h. Balance sheet, Statement of cash flows i. Statement of retained earnings, Statement of cash flows j. Balance sheet k. Balance sheet l. Income statement m. Statement of cash flows n. Statement of cash flows

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    Financial Accounting 9/e Solutions Manual 1 - 20 (10 - 20 min.) E 1 - 33B Jill Carlson Banking Company Balance Sheet ( Amounts in millions ) May 31, 2012 ASSETS LIABILITIES Cash $ 2.3 Current liabilities $152.6 Receivables 0.8 Long - term liabilities 2.7 Investment assets 169.5 Total liabilities 155.3 Property and equipment, net 1.2 STOCKHOLDERS’ EQUITY Other assets 14.6 Common stock 14.8 Retained earnings 18.3 * Total stockholders’ equity 33.1 Total assets $188.4 Total liabilities and stockholders’ equity $188.4 _____ *Computation of retained earnings: Total assets ($188.4) − Total liabilities ($155.3) − Common stock ($14.8) = $18.3

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    Chapter 1 The Financial Statements 1 - 21 (15 - 25 min.) E 1 - 34B Req. 1 Jill Carlson Banking Company Income Statement ( Amounts in millions ) Year Ended May 31, 2012 Total revenue ................................ ................................ $34.7 Expenses: Salary and ot her employee expenses ................... $ 17.3 Other expenses ................................ ....................... 6.6 Interest expense ................................ ..................... 0.7 Total expenses ................................ ........................ 24.6 Net income ................................ ................................ .... $ 10.1 Req. 2 The statement of retained earnings helps to compute dividends, as follows: Jill Carlson Banking Company Statement of Retained Earnings ( Amounts in millions ) Year Ended May 31, 2012 Retained earnings, beginning of year………………………… . $ 8.7 Add: Net income f or the year ( Req. 1 )…….……………… … … 10.1 18.8 Less: Dividends ................................ ................................ ....... 0.5 Retained earnings, end of year (from Exercise 1 - 33B) ......... $18.3

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    Financial Accounting 9/e Solutions Manual 1 - 22 (15 - 20 min.) E 1 - 35B Groovy, Inc. Statement of Cash Flows Year Ended December 31, 2012 Cash flows from operating activities: Net income ................................ ........................... $360,000 Adjustments to reconcile net income to net cash provided by operating activities ............ 60,000 Net cash provided by operating activities .............. $420,000 Cash flows from investing activities: Net cash used for investing activities ..................... (410,000) Cash flows from financing activities: Net cash provided by financing activities .............. 5,000 Net increase in cash ................................ ................................ .. 15,000 Beginning cash balance ................................ ........................... 95,000 Ending cash balance ................................ ................................ . $110,000 Items given that do not appear on the statement of cash flows: Total assets − Balance sheet Total liabilities − Balance sheet

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    Chapter 1 The Financial Statements 1 - 23 (15 - 20 min.) E 1 - 36B Croyden Copy Center Income Statement For the Month Ended July 31, 2013 Revenue: Service revenue……… ………………. $544, 600 Expenses: Salary expense………… …………….. $157,000 Utilities expense………… …………... 10,500 Rent expense……. … ………………… 2,500 Total expenses…… ………………….. 170,000 Net income………… ……………………… $ 374,600 Croyden Copy Center Statement of Retained Earnings For the Month Ended July 31, 2013 Retained earnings, July 1, 2013 ............................... $ - 0 - Add: Net income for the month ................................ 374,600 374,600 Less: Dividends ................................ ......................... (4,800 ) Retained earnings, July 31, 2013 ............................. $369,800

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    Financial Accounting 9/e Solutions Manual 1 - 24 (15 - 20 min.) E 1 - 37B Croyden Copy Center Balance Sheet July 31, 2013 Assets Liabilities Cash……………… ... $ 11,100 Accounts payable………… … $ 17,300 Office supplies…… 14,800 Equipment………… 410,000 Stockholders’ Equity Common stock……………….. 48,800 Retained earnings…………… 369,800 Total stockholders’ equity 418,600 Total liabilities and Total assets……… $435,900 stockholders’ equity……… . $435,900 15 - 20 min.) E 1 - 38B Croyden Copy Center Statement of Cash Flows For the Month Ended July 31, 2013 Cash flows from operating activities: Net income ................................ ......................... $ 374,600 Adjustments to reconcile net income to net cash provided by operations .......................... 2,500 Net cash provided by operating activities … 377,100 Cash flows from investing activities: Acquisition of equipment ................................ . $(410,000 ) Net cash used for investing activities… ….. (410,000) Cash flows from financing activities: Issuance (sale) of stock to owners .................. $ 48,800 Payment of dividends ................................ ....... (4,800 ) Net cash provided by financing activities … 44,000 Net increase in cash ................................ ............... $ 11,100 Cash balance, July 1, 2013 ................................ .... 0 Cash balance, July 31, 2013 ................................ .. $ 11,100

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    Chapter 1 The Financial Statements 1 - 25 (10 - 15 min.) E 1 - 39B TO: Owner of CROYDEN Copy Center, Inc. FROM: Student Name SUBJECT: Opinion of net income, dividends, financial position, and cash flows Your first month of operations was successful. Revenues totaled $544,600 and net income was $374,600. These operating results look very strong. The company was able to pay a $4,800 dividend, and this should make you happy with so quick a return on your investment. Your financial position looks secure, with assets of $435,900 and liabilities of only $17, 3 00. Your stockholders’ equity is $418,600. Operating activities generated cash of $377,100, which is respectable. You ended the month with cash of $11,100. Based on the above facts, I believe you should stay in business. Student responses may vary.

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    Financial Accounting 9/e Solutions Manual 1 - 26 Quiz Q1 - 40 c Q1 - 41 c Q1 - 42 c Q1 - 43 b Stockholders’ Assets = Liabilities + Equity + $28,000 = + $9,000 + + $19,000 Q1 - 44 d Q1 - 45 d Q1 - 46 a Q1 - 47 a Q1 - 48 a Q1 - 49 a [$55,000 − $58,000 − $21,000 − $6,000 = $(30,000)] Q1 - 50 d ($200,000 + $105,000 − $45,000 = $260,000) Q1 - 51 d Q1 - 52 b Q1 - 53 d Stockholders’ Assets = Liabilities + Equity Beg. $25,000 = $ 4,000* + $21,000 Changes + 12,000 End. $39 ,000* = $16,000* + $23,000 _____ *Must solve for these amounts. Q1 - 54 a Assets − Liabilities = Stockholders’ equity Beg. bal. $530,000 − $24,000 = $506,000 + Net income + X − Dividends − 80,000 End. bal. $750,000 − $33,000 = $717,000

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    Chapter 1 The Financial Statements 1 - 27 Problems (15 - 30 min.) P 1 - 55A Req. 1 A Division of Harrold Corporation Income Statement Year Ended December 31, 2013 Revenue: Service revenue ................................ .... $2 50,000 Other revenue ................................ ....... 57,000 Total revenue ................................ ........ $307,000 Expenses: Salary expense ................................ ..... $ 29,000 Other expenses ................................ .... 242,000 Total operating expenses .................... 271,000 Income before income tax ............................ 36,000 Income tax expense ($36,000 × .34) ............. 12,240 Net income ................................ ..................... $ 23,760 Req. 2 a. Faithful representation. Report revenues at their actual sale value because that amount represents more faithfully what actually happened than what management believes the services are worth. b. Historical cost principle. Account for expenses at their actual cost, not a hypothetical amount that the company might have incurred under other conditions. c. Historical cost principle. Account for expenses at their actual cost.

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    Financial Accounting 9/e Solutions Manual 1 - 28 (continued) P 1 - 55A d. Entity assumption. Each subdivision of the company is a separate entity, and the company as a whole constitutes an entity for accounting purposes. e. Stable - monetary - unit assumption. Accounting in the United States ignores the effect of inflation. f. Continuity (going - concern) assumption. There is no evidence that A Division of Harrold Corporation is going out of business, so it seems safe to assume that the division is a going concern.

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    Chapter 1 The Financial Statements 1 - 29 (30 min.) P 1 - 56A Req. 1 Computed amounts in boxes Ruby Lars Barb Millions Balance sheets: Beginning : Assets………………………... $ 78 $ 40 $ 14 Liabilities…………………….. 45 14 1 Common stock……………... 4 3 6 Retained earnings…………. 29 23 7 Ending : Assets………………………... $ 84 $ 59 $ 17 Liabilities…………………….. 47 26 2 Common stock……………... 4 3 6 Retained earnings…………. 33 30 9 Income statement : Revenues……………………. $220 $ 170 $21 Expenses……………………. 214 160 18 Net income………………….. $ 6 $ 10 3 Statement of retained earnings: Beginning RE……………….. $ 29 $ 23 $ 7 + Net income………………….. 6 10 3 − Dividends……………………. (2) (3) (1) = Ending RE…………………… $ 33 $ 30 $ 9

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    Financial Accounting 9/e Solutions Manual 1 - 30 (continued) P 1 - 56A Req. 2 Ruby Lars Barb Millions Net income…………. $6 $10 $3 Highest % of net income $6 = 2.7% $10 = 5.9% $3 = 14.3% to revenues……… $220 $170 $21 Highest

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