3-9 FINANCIAL STATEMENTS The Davidson Corporation's balance sheet and income statement are provided here. Davidson Corporation: Balance Sheet as of December 31, 2008 (Millions of Dollars) Assets Liabilities and Equity Cash and equivalents $ 15 Accounts payable Accounts receivable 515 Notes payable Inventories 880 Accruals Total current assets $1,410 Total current liabilities Net plant and equipment 2,590 Long-term bonds Total debt Common stock (100 million shares) Retained earnings Common equity Total assets $4,000 Total liabilities and equity $ 120 220 280 $ 620 1,520 $2,140 260 1,600 $1,860 $4,000 Davidson Corporation: Income Statement For Year Ending December 31, 2008 (Millions of Dollars) Sales $6,250 Operating costs excluding depreciation and amortization 5,230 EBITDA $1,020 Depreciation & amortization 220 EBIT Interest EBT Taxes (40%) Net income Common dividends paid Earnings per share $ 800 180 $ 620 248 $ 372 $ 146 $ 3.72 a. Construct the statement of stockholders' equity for December 31, 2008. 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?