Condensed financial statements for Wm. Wrigley Jr. Company for 2004 and 2003 are shown in Exhibits 9 and 10 of this chapter. Based upon these financial statements, answer the following questions:
1. Using the accounting equation, Assets = Liabilities = Stockholders’ Equity, fill in the amounts for 2003. Express the amounts in millions.
2. If during 2004, assets increased by $646 and liabilities increased by $288, determine the increase or decrease in stockholders’ equity during 2004.
3. Based upon your answers to (1) and (2), determine the total stockholders’ equity as of December 31, 2004. Does this amount agree with Wrigley’s balance sheet shown in Exhibit 9?
4. Based upon Exhibit 9, what percent of Wrigley’s total assets was financed by debt during 2004? Assuming you are a long-term creditor of Wrigley, interpret this percent in terms of the chances that you will be repaid by Wrigley.
5. Assuming that in (4) you are a short-term creditor of Wrigley, would your interpretation and analysis of your chances of being repaid change?