Balance sheet relations. Selected balance sheet amounts for Procter \& Gamble, a consumer products company, for four recent years appear below (amounts in millions):

a. Compute the missing balance sheet amounts for each of the four years.

b. What is the likely explanation for the increase in total assets between Year 6 and Year 7?

c. What transactions might explain the changes in noncurrent liabilities and retained earnings between Year 7 and Year 8?

d. What transactions might explain the changes in the mix of financing between Year 8 and Year 9 ?

Transcribed Image Text:

Current Assets Noncurrent Assets Total Assets Current Liabilities Noncurrent Liabilities Contributed Capital Retained Earnings Total Liabilities and Shareholders' Equity.... Year 6 Year 7 Year 8 Year 9 $ 8,435 ?a $ 9,975 $ 9,988 ? ? 14,960 ? ? $24,025 ? ? 6,733 7,642 8,287 ?c 5,999 ? 9,207 ? ? 1,149 ? 1,399 6,719 7,922 ?b ?d 20,468 ? ? 25,535 "Current Assets Current Liabilities = $1,724. "Net loss for Year 8 is $656 and dividends are $1,117. "Current Assets - Current Liabilities = $1,948. "Net income for Year 9 is $2,524 and dividends are $1,240.