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a. Construct the statement of stockholders' equity for December 31, 2018. No common stock was issued during 2018. 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 Farnings Amount Fquity Dalances, 12/31/17 2018 Net income Cash dividonds Arldlit ion to RP Balances, 12/31/18 Enler your atnswers for parls b-d in millions. For exarmple, an answer of $25,000,000 stiould be entered as 25. b. How much money has been reinvested in the firm over the years? Round your answer to the nearest hundredth of milion, if necessary. 1million C. AL Lhe present lime, how larye a ctieck culd be wrillen wilthoul il bounciny? Round your aiswer lo tlhe nearest hundredihi of million, if necessary. million d. 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

a. Construct the statement of stockholders' equity for December 31, 2018. No common stock was issued during 2018. 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 Farnings Amount Fquity Dalances, 12/31/17 2018 Net income Cash dividonds Arldlit ion to RP Balances, 12/31/18 Enler your atnswers for parls b-d in millions. For exarmple, an answer of $25,000,000 stiould be entered as 25. b. How much money has been reinvested in the firm over the years? Round your answer to the nearest hundredth of milion, if necessary. 1million C. AL Lhe present lime, how larye a ctieck culd be wrillen wilthoul il bounciny? Round your aiswer lo tlhe nearest hundredihi of million, if necessary. million d. 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

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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**The Davidson Corporation's Financial Statements Overview** **Balance Sheet as of December 31, 2018 (Millions of Dollars)** **Assets:** - Cash and equivalents: $20 - Accounts receivable: $190 - Inventories: $910 **Total current assets:** $1,420 - Net plant and equipment: $2,530 **Total assets:** $3,950 **Liabilities and Equity:** - Accounts payable: $120 - Accruals: $300 - Notes payable: $230 **Total current liabilities:** $650 - Long-term bonds: $1,520 **Total liabilities:** $2,170 - Common stock (100 million shares): $280 - Retained earnings: $1,500 **Common equity:** $1,780 **Total liabilities and equity:** $3,950 **Income Statement for Year Ending December 31, 2018 (Millions of Dollars)** - Sales: $6,250 - Operating costs excluding depreciation and amortization: $4,290 **EBITDA:** $1,960 - Depreciation and amortization: $247.5 **EBIT:** $1,712.5 - Interest: $217 **EBT:** $1,495.5 - Taxes (40%): $598.2 **Net income:** $897.3 - Common dividends paid: $101.0 **Earnings per share:** $0.8973 These financial statements provide a snapshot of the financial health of Davidson Corporation, detailing assets, liabilities, equity, and the income generated during the year 2018.
Transcribed Image Text:**The Davidson Corporation's Financial Statements Overview** **Balance Sheet as of December 31, 2018 (Millions of Dollars)** **Assets:** - Cash and equivalents: $20 - Accounts receivable: $190 - Inventories: $910 **Total current assets:** $1,420 - Net plant and equipment: $2,530 **Total assets:** $3,950 **Liabilities and Equity:** - Accounts payable: $120 - Accruals: $300 - Notes payable: $230 **Total current liabilities:** $650 - Long-term bonds: $1,520 **Total liabilities:** $2,170 - Common stock (100 million shares): $280 - Retained earnings: $1,500 **Common equity:** $1,780 **Total liabilities and equity:** $3,950 **Income Statement for Year Ending December 31, 2018 (Millions of Dollars)** - Sales: $6,250 - Operating costs excluding depreciation and amortization: $4,290 **EBITDA:** $1,960 - Depreciation and amortization: $247.5 **EBIT:** $1,712.5 - Interest: $217 **EBT:** $1,495.5 - Taxes (40%): $598.2 **Net income:** $897.3 - Common dividends paid: $101.0 **Earnings per share:** $0.8973 These financial statements provide a snapshot of the financial health of Davidson Corporation, detailing assets, liabilities, equity, and the income generated during the year 2018.
**Educational Transcription and Explanation** --- **Financial Data and Calculation Exercise** To help solidify your understanding of financial statements, let's examine a practical exercise in constructing a statement of stockholders' equity for December 31, 2018. **Financial Information Provided:** - **Depreciation and amortization:** $247.5 - **EBIT (Earnings Before Interest and Taxes):** $3,712.5 - **Interest:** $21 - **EBI (Earnings Before Income Taxes):** $3,495.5 - **Taxes (40%):** $1,398.2 - **Net income:** $2,097.3 - **Common dividends paid:** $1,017.1905 - **Earnings per share:** $20.9/3 **Exercise Instructions:** Construct the statement of stockholders' equity as of December 31, 2018. Note that no common stock was issued during 2018. Ensure all answers are presented completely and rounded to the nearest share or dollar. **Stockholders' Equity Statement Structure:** | | Common Stock | Retained Earnings | Total Stockholders' Equity | |----------------------|--------------|-------------------|----------------------------| | **Balances, 12/31/17** | | | | | **2018 Net Income** | | | | | **Cash dividends** | | | | | **Addition to RF** | | | | | **Balances, 12/31/18** | | | | **Further Calculations:** For sections b-d, answers should be entered in millions, e.g., $25,000,000 should be entered as 25. b. **Reinvested Money Over the Years:** How much has been reinvested in the firm over the years? Round to the nearest hundredth of a million, if necessary. - $_____ million c. **Check Amount Without Bouncing:** At the present time, how large a check could be written without it bouncing? Round to the nearest hundredth of a million, if necessary. - $_____ million d. **Payment to Creditors:** How much money must be paid to current creditors within the next year? Round to the nearest hundredth of a million, if necessary. - $_____ million This exercise is designed
Transcribed Image Text:**Educational Transcription and Explanation** --- **Financial Data and Calculation Exercise** To help solidify your understanding of financial statements, let's examine a practical exercise in constructing a statement of stockholders' equity for December 31, 2018. **Financial Information Provided:** - **Depreciation and amortization:** $247.5 - **EBIT (Earnings Before Interest and Taxes):** $3,712.5 - **Interest:** $21 - **EBI (Earnings Before Income Taxes):** $3,495.5 - **Taxes (40%):** $1,398.2 - **Net income:** $2,097.3 - **Common dividends paid:** $1,017.1905 - **Earnings per share:** $20.9/3 **Exercise Instructions:** Construct the statement of stockholders' equity as of December 31, 2018. Note that no common stock was issued during 2018. Ensure all answers are presented completely and rounded to the nearest share or dollar. **Stockholders' Equity Statement Structure:** | | Common Stock | Retained Earnings | Total Stockholders' Equity | |----------------------|--------------|-------------------|----------------------------| | **Balances, 12/31/17** | | | | | **2018 Net Income** | | | | | **Cash dividends** | | | | | **Addition to RF** | | | | | **Balances, 12/31/18** | | | | **Further Calculations:** For sections b-d, answers should be entered in millions, e.g., $25,000,000 should be entered as 25. b. **Reinvested Money Over the Years:** How much has been reinvested in the firm over the years? Round to the nearest hundredth of a million, if necessary. - $_____ million c. **Check Amount Without Bouncing:** At the present time, how large a check could be written without it bouncing? Round to the nearest hundredth of a million, if necessary. - $_____ million d. **Payment to Creditors:** How much money must be paid to current creditors within the next year? Round to the nearest hundredth of a million, if necessary. - $_____ million This exercise is designed
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