Effect of Net Income on a Company's Balance Sheet Conrad Air, Inc., reported net income of $1,375,000 for the year ended December 31, 2016. 

Show how Conrad's balance sheet would change from 2015 to 2016 depending on how Conrad spent" those earnings as described in the scenarios below.

Conrad Air, Inc. Balance Sheet
as of December 31, 2015
Assets
Cash : $123,000
Marketable Securities: 34,000
Accounts Receivable: 42,000
Inventories: 131,000
Current Assets: $330,000
Equipment: $2,965,000
Buildings: 1,609,000
Fixed Assets: $4.57 4,000
Total Assets: $4,904,000

Liabilities and Stockholders' Equity
Accounts Payable: $71,000
Short-Term Notes: 50,000
Current Liabilities: $121,000
Long-Term Debt: $2,705,000
Total Liabilities: $2,826,000
Common Stock: $495,000
Retained Earnings: 1,583,000
Stockholders' Equity: $2,078,000
Total liabilities and equity: $4,904,000

a. Conrad paid no dividends during the year and invested the funds in marketable securities, will the amount be transferred to the balance sheet?

b. Conrad paid dividends totaling $497,000 and used the balance of net income to retire (pay off) long-term debt.

C. Conrad paid dividends totaling $497,000 and invested the balance of the net proceeds to build a new hangar.

d. Conrad paid $1,375,000 as dividends to his stockholders.