Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Davidson Corporation's balance sheet and income statement are provided here. Davidson Corporation: Balance Sheet as of December 31, 2021 (millions of dollars) Assets Liabilities

The Davidson Corporation's balance sheet and income statement are provided here.

Davidson Corporation: Balance Sheet as of December 31, 2021
(millions of dollars)
Assets Liabilities and Equity
Cash and equivalents $ 10 Accounts payable $ 140
Accounts receivable 490 Accruals 320
Inventories 820 Notes payable 225
Total current assets $ 1,320 Total current liabilities $ 685
Net plant and equipment 2,635 Long-term bonds 1,520
Total liabilities $ 2,205
Common stock (100 million shares) 250
Retained earnings $ 1,500
Common equity $ 1,750
Total assets $ 3,955 Total liabilities and equity $ 3,955

Davidson Corporation: Income Statement for Year Ending
December 31, 2021 (millions of dollars)
Sales $ 7,500
Operating costs excluding depreciation and amortization 5,990
EBITDA $ 1,510
Depreciation and amortization 440
EBIT $ 1,070
Interest 170
EBT $ 900
Taxes (25%) 225
Net income $ 675
Common dividends paid $ 253
Earnings per share $ 6.75

Construct the statement of stockholders' equity for December 31, 2021. No common stock was issued during 2021. Write out all your answers completely. For example, 25 million should be entered as 25,000,000. Round your answers to the nearest share or dollar.

Common Stock Retained Total Stockholders'
Shares Amount Earnings Equity
Balances, 12/31/20 ? $ ? $ ? $ ?
2021 Net income ?
Cash dividends ?
Addition to RE ?
Balances, 12/31/21 ? $ ? $ ? $ ?

Enter your answers for parts b-d in millions. For example, an answer of $25,000,000 should be entered as 25.

How much money has been reinvested in the firm over the years? Round your answer to the nearest hundredth of million, if necessary.

$ ________ million

At the present time, how large a check could be written without it bouncing? Round your answer to the nearest hundredth of million, if necessary.

$ _________ million

How much money must be paid to current creditors within the next year? Round your answer to the nearest hundredth of million, if necessary.

$ _________ million

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions