(L. OBJ. 7, 9, 10) Using the accounting equation, preparing financial statements, and evaluating business performance [10—15 min]
The 2011 annual report of Priority Parcel Service (PPS) reported revenue of $28 billion. Total expenses for the year were $21 billion. PPS ended the year with total assets of $37, billion, and it owed debts totaling $17 billion. At year-end 2010, the business reported total assets of $30 billion and total liabilities of $17 billion.
Requirements
1. Compute PPS’s net income for 2011.
2. Did PPS’s owner’s equity increase or decrease during 2011? By how much?
3. How would you rare PPS’s performance for 2011—good or bad? Give your reason. (Challenge)
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