Using the accounting equation, determine the company’s stockholders’ equity. Compare this amount to the amount of stockholders’ equity reported on the company’s balance sheet. What is the difference between the information reported on the income statement and the information reported on the balance sheet
Using the accounting equation, determine the company’s stockholders’ equity. Compare this amount to the amount of stockholders’ equity reported on the company’s balance sheet. What is the difference between the information reported on the income statement and the information reported on the balance sheet
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 82E
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Using the accounting equation , determine the company’s stockholders’ equity . Compare this amount to the amount of stockholders’ equity reported on the company’s balance sheet .
What is the difference between the information reported on the income statement and the information reported on the balance sheet?
Expert Solution
Step 1
The question provides us with the Income statement and consolidated balance sheet of United Parcel Services Inc. of last 5 years. The income statement provides us with the selected data of the balance sheet. The balance sheet is a consolidated balance sheet of the holding company along with its subsidiaries.
Now, the accounting equation states that = Total assets - Total liabilities = Shareholder's equity
Shareholder's equity consists of paid up share capital and retained earnings and free reserves.
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