Q.1 The following interpretations and remarks are common misinterpretations of financial statement. Explain fully the fallacy in each 1. "Sales show the cash coming in from customers, and the various expenses show the cash going out for goods and services. The difference is net income 2. Consider the following December 31, 2002 accounts of Motorola INc., U.S company that is leading worldwide provider of wireless communications, semiconductors, and advanced electronic systems, as well as components and services. You may have used one of its cell phone Motorola, Inc Consolidated Balance Sheets) in millions, exce k holders equity r share amounts 2001 ommon stock, $3 par value shares 2002 and 2001, 4.200 ssued and outstanding shares 2002, 2.315.369476,764 2001 2.254.0 Paid in capital 31,707 434 523) (214) otal stock hoers equity 11239 513,691 A Motorola employee commented, "Why can 't that big company pay higher wages and dividends, too? It can use its hundreds of millions of dollars of retained earnings to do so 3. "The total Motorola stock hoers equity measures the amount that the shareholders would get today if the corporation ceased business, sold its assets, and paid off its liabilities