Effect of net income on a firm's balance sheet Conrad Air, Inc., reported net income of $1,369,000 for the year ended December 31, 2020. Show how Conrad's balance sheet would change from 2019 to 2020 depending on how Conrad "spent" those earnings as described in the scenarios that appear below. a. Conrad paid no dividends during the year and invested the funds in marketable securities b. Conrad paid dividends totaling $504,000 and used the balance of the net income to retire (pay off) long-term debt. c. Conrad paid dividends totaling $504,000 and invested the balance of the net income in building a new hangar. x d. Conrad paid out all $1,369,000 as dividends to its stockholders. Data Table a. If Conrad paid no dividends during the year and invested the funds in marketable securities, the amount transferred to the balance sheet will be $ (Round to the nearest dollar.) The ending marketable securities will be $(/. (Round to the nearest dollar.) The ending retained earnings will be $(Round to the nearest dollar.) b. If Conrad paid dividends totaling $504,000 and used the balance of the net income to retire (pay off) long-term debt, the amount transferred to the balance sheet will be $1. (Round to the nearest dollar.) The ending long-term debt will be $ (Round to the nearest dollar.) (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Conrad Air, Inc. Balance Sheet as of December 31, 2019 Assets Cash $116,000 Marketable securities 35,000 Accounts receivable 49,000 Inventories 128,000 Current assets $328,000 Equipment $2,977,000 Buildings 1,608,000 Fixed assets $4,585,000 Total assets $4.913,000 The ending retained earnings will be $ (Round to the nearest dollar.) c. If Conrad paid dividends totaling $504,000 and invested the balance of the net income in building a new hangar, the amount transferred to the balance sheet will be $ (Round to the nearest dollar.) The ending buildings will be $ (Round to the nearest dollar.) The ending retained earnings will be $(Round to the nearest dollar.) d. If Conrad paid out all $1,369,000 as dividends to its stockholders, the amount transferred to the balance sheet will be $1. (Round to the nearest dollar.) The ending retained earnings will be $ (Round to the nearest dollar.) Liabilities and Stockholders' Equity Accounts payable Short-term notes Current liabilities Long-term debt Total liabilities Common stock Retained earnings Stockholders' equity Total liabilities and equity $70,000 54,000 $124,000 $2,720,000 $2,844,000 $499,000 1,570,000 $2,069,000 $4,913,000
