Sam and his sister Blair both attend the state university. As a reward for their successful completion of the past year (Sam had a 3.2 GPA in business, and Blair had a 3.7 GPA in art), their father gave each of them 100 shares of The Walt Disney Company stock. They have just received their first annual report. Blair does not understand what the information means and has asked Sam to explain it to her.

Required
Assume you are Sam. Write Blair a memo explaining the following financial statement items to her. In your explanation, describe each of the two financial statements and explain the financial information each contains. Also define each of the elements listed for each financial statement and explain what it means.

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Balance Sheet Assets Liabilities Stockholders' equity Income Statement Revenue Expense Net income