Chapter 03 Post-quiz The Davidson Corporation\'s balance sheet and income statem

Question

Chapter 03 Post-quiz The Davidson Corporation's balance sheet and income statement are provided here Davidson Corporation: Balance Sheet as of December 31, 2018 (Millions of Dollars) 6, 0.00 8. 2.0 Assets 9.1.00 Cash and equivalents 10.1.00 11.0.00 Total current assets Liabilities and Equity $ 20 Accounts payable $ 130 270 235 $635 1,400 $2,125 250 $1,500 $1,750 3,875 Accounts receivable 545 Accruals Inventories 860 Notes payable 1,425 Total current liabilities Net plant and equipment 2,450 Long-term honds Total llabilitles Comion stock (100 million shares) Retained earnings Common equity Tolal assels S 3,875 Tolal liabililies and equily Davidson Corporation: Income Statement for Year Ending December 31, 2018 (Millions of Dollars) Gales Operating costs excluding depreciation and amortization EBITDA Depreciation and amortization 4,250 2.592.5 1,657.5 85 11-18 PM D e MindTap Cengage @ m @) N 1-Paint .. 9/28/2018 3

Explanation / Answer

a.. Common Stock Retained Earnings Total stockholders'Equity Shares Amount Balances, 12/31/17 100000000 250000000 940402500 1190402500 2018 Net Income 841500000 Cash dividends -281902500 Additions to RE 559597500 Balances, 12/31/18 100000000 250000000 1500000000 1750000000 Retained earnings Balances, 12/31/17 1500000000-(841500000-281902500)= 940402500 b.Money reinvested in the firm over the years Op. bal of Ret. Earn. 940402500 2018 Additions 559597500 Total 1500000000 c.Amt. of check,that will be honored , without bouncing Equal to cash 20000000 d.Money to be paid to current creditors within the next year Accounts payable 130000000 Accruals 270000000 Total 400000000

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