(Complete a set of financial statements, LO 1, 2, 4) Below are three years of balance sheets, income statements, and statements of retained earnings for Auburndale Ltd.

Required:

a. Replace the missing information in the shaded areas with the appropriate amount. Begin your analysis in 2004 and work forward.

b. If you were a banker, would you lend Auburndale Ltd. $5,000,000? Explain your answer. What additional information would you require to make your decision whether to lend? Explain.

Transcribed Image Text:

Auburndale Ltd. Statements of Retained Earnings For the Year Ended December 31 (in thousands of dollars) Retained Earnings, Beginning of Year Net income Dividends Retained Earnings, End of year 2006 2005 2004 $11,900 262 262 $14,694