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Chapter 1 week 1 E1-26

Chapter 1 week 1 E1-26 - 2 Did UPS’s owner’s equity...

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E1-26. In this exercise you will practice using the data of a well-known company with the amounts rounded. The 2004 annual report of UPS, the overnight shipping company, reported revenue of $32 billion. Total expenses for the year were $29 billion. UPS ended the year with total assets of $33 billion, and it owed debts totaling $17 billion. At year-end 2003, UPS reported total assets of $30 billion and total liabilities of $17 billion. Requirements 1. Compute UPS’s net income for 2004 (p.20)
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Unformatted text preview: 2. Did UPS’s owner’s equity increase or decrease during 2004? By how much? (p.20) 3. How would you rate UPS’s performance for 2004—good or bad? Give your reason. (challenge) 1. Net income for UPS in 2004 was (subtract $29 billion in expenses from $32 billion of revenue). Total net income is $3 billion. 2. UPS’s owner’s equity increased by $3 billion. 3. Good, UPS’s assets increased by $3 billion, liabilities did not increase, and revenue was higher than the expenses....
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