Below are approximate amounts related to retained earnings reported by five comp

Question

Below are approximate amounts related to retained earnings reported by five companies in previous years. 1. Coca-Cola reports an increase in retained earnings of $1.8 billion and net income of $4.1 billion. 2. Pepsico reports an increase in retained earnings of $2.0 billion and dividends o $1.2 billion. 3. Google reports an increase in retained earnings of $1.46 billion and net income of $1.46 billion. 4. Sirius Satellite Radio reports beginning retained earnings of-$1.88 billion, net loss of $O.86 billion, and $0 dividends. 5. Abercrombie & Fitch reports ending retained earnings of $1.64 billion, net income of $0.29 billion, and dividends of $0.04 billion. (Enter your answers in billions rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.) Required 1. What is the amount of dividends of Coca-Cola? 2. What is the amount of net income of Pepsico? 3. What is the amount of dividends of Google? 4. What is the amount of ending retained earnings of Sirius Satelite Radio? 5. What is the amount of beginning retained earnings of Abercrombie & Fitch? Check mv work

Explanation / Answer

We will use below equation:

Net income = Retained earnings + Dividends

1.

Dividends = 4.1 - 1.8 = $2.3 billions

2.

Net income = 2 + 1.2 = $3.2 billions

3.

Dividend = 1.46 - 1.46 = $0 billions

4.

Ending retained earning = Beginning retained earning + Net loss

Ending retained earning = -1.88 - 0.86 = -$2.74 billions

(Please apply “signages” according to answering guidelines)

5.

Beginning retained = Ending retained earning - (Net income - Dividend)

Beginning retained = 1.64 - (0.29 - 0.04) = $1.39 billions

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