FINANCIAL STATEMENTS The Davidson Corporation’s balance sheet and income statement are provided here.

Davidson Corporation: Balance Sheet as of December 31, 2014

(Millions of Dollars)

Assets Liabilities and Equity Cash and equivalents $ 15 Accountspayable $ 120 Accounts receivable 515 Accruals 280 Inventories 880 Notes payable 220 Total current assets $1,410 Total current liabilities $ 620 Net plant and equipment 2,590 Long-term bonds 1,520 Total liabilities $2,140 Common stock (100 million shares) 260 Retained earnings 1,600 Common equity $1,860 Total assets $4,000 Total liabilities and equity $4,000.

Davidson Corporation: Income Statement for Year Ending December 31, 2014 (Millions of Dollars)
Sales $6,250 Operating costs excluding depreciation and amortization 5,230 EBITDA $1,020 Depreciation & amortization 220 EBIT $ 800 Interest 180 EBT $ 620 Taxes (40%) 248 Net income $ 372 Common dividends paid $ 146 Earnings per share $ 3.72

a. Construct the statement of stockholders’ equity for December 31, 2014. No common stock was issued during 2014.

b. How much money has been reinvested in the firm over the years?

c. At the present time, how large a check could be written without it bouncing?

d. How much money must be paid to current creditors within the next year?AppendixLO1