The Davidson Corporation’s balance sheet and income statement are given here: Davidson Corporation: Balance Sheet as of December 31, 2005 (Millions of Dollars) 

Davidson Corporation: Income Statement for Year Ending December 31, 2005 (Millions of Dollars)

a. All revenues were received in cash during the year and all costs except depreciation and amortization were paid in cash during the year. What was net cash flow? How was it different from reported accounting profit?

 b. Construct the statement of retained earnings for December 31, 2005.

 c. How much money has been reinvested in the firm over the years?

 d. At the present time, how large a check could be written without it bouncing?

 e. How much money must be paid to current creditors within the next year?

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Assets Cash and equivalents Accounts receivable Inventories Total current assets Net plant and equipment Total assets $ 15 515 880 $1,410 2,590 $4,000 Liabilities and Equity Accounts payable Notes payable Accruals Total current liabilities Long-term bonds Total debt Common stock (100 million shares) Retained earnings Common equity Total liabilities and equity $ 120 220 280 $ 620 1,520 $2,140 260 1,600 $1,860 $4,000