Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Presented in the line graphs below are trends in revenues and expenses for each of three companies over their first six years of operations. The

Presented in the line graphs below are trends in revenues and expenses for each of three companies over their first six years of operations. The balance of the Retained Earnings account at the end of each year is presented by the bars. Each company has the same amount of revenues in Year 1 and the same amount of expenses in Year 1. Assume no dividends were paid by any of the companies.
Required:
1. For Company A, revenues over the six years are:
2. For Company C, expenses in Year 5 are:
3. For Company A, the difference between revenues and expenses is the same in each of the six years. Therefore, the companys balance of Retained Earnings over the six years:
4. Company B has the same amount of expenses as Company A in each year, but revenues are growing at a faster pace. Therefore, by the end of Year 6, Company Bs balance of Retained Earnings will be:
5a. Company C has the same amount of revenues as Company A in each year, but expenses are growing at a faster pace. Therefore, by the end of Year 6, Company Cs balance of Retained Earnings will be:
5b. In a year that Company C reports expenses greater than revenues, the balance of Retained Earnings:
5c. By the end of Year 6, Company Cs balance of Retained Earnings is:
6. If any of these companies had paid dividends in any year, their balances of Retained Earnings by the end of year 6 would have been:
image text in transcribed
image text in transcribed
image text in transcribed
Company A Revenues, Expenses, and Retained Earnings Company C Revenues, Expenses, and Retained Earnings $32,000,000 $20,000,000 $8,000,000 ($4,000,000) Retained Earnings Revenues Expenses Company B Revenues, Expenses, and Retained Earnings

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing In The Food Industry From Safety And Quality To Environmental And Other Audits

Authors: M Dillon, C Griffith

1st Edition

1855734508, 978-1855734500

More Books

Students also viewed these Accounting questions

Question

manageremployee relationship deteriorating over time;

Answered: 1 week ago