Conrad Air, Inc., reported net income of $1,365,000 for the year ended December 31, 2013. Show how Conrad€™s balance sheet would change from 2012 to 2013 depending on how Conrad €œspent€ 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 $500,000 and used the balance of the net income to retire (pay off) long-term debt.
c. Conrad paid dividends totaling $500,000 and invested the balance of the net income in building a new hangar.
d. Conrad paid out all $1,365,000 as dividends to itsstockholders.

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Conrad Air, Inc. Balance Sheet as of December 31, 2012 Liabilities and Stockholders' Equity Assets Cash Marketable securities Accounts receivable Inventories S120,000 Accounts payable 35,000 Short-term notes S 70,000 45,000 Current liabilities s 125,000 130,000 Long-term debt 330,000 ol lialities Current assets Equipment Buildings $2,825,000 S 500,000 $2,970,000 Common stock L600,000 Retained earnings Fixed assets Total assets $4.570.000 Stockholders equity $2.075.000 $4,900,000 Total liabilities and equity $4.900.000