Below is the balance sheet for Glucose Control Company as of Dec. 31, 2021. The company...

 

Transcribed Image Text:

Below is the balance sheet for Glucose Control Company as of Dec. 31, 2021. The company reported an annual net income of $83,000 for the following year, 2022, but did not change its assets or liabilities, unless otherwise noted. Assets Cash 39,000 9.000 Marketable securities 2,000 Accounts receivable 6,000 Inventory 28,000 Current assets 45,000 Machines 34,000 80,000 114,000 159,000 Real estate Fixed assets Total assets 0+ decimals B Attempt 2/10 for 10 pts. Part 1 If the company distributed its entire net income as dividends, what would be the value of total equity on Dec. 31, 2022? Submit 0+ decimals Liabilities and Equity Accounts payable Correct ✓ Since the company pays out all its net income and does not retain any earnings, the value of equity as well as all other balance sheet items are unaffected. The total value of equity is thus still $39,000. Submit Notes payable Current liabilities Long-term debt B Attempt 4/10 for 10 pts. Part 2 If the company distributed half of its net income as dividends and used the rest to invest in new machines, what would be the value of total equity on Dec. 31, 2022? 19,000 6,000 25,000 95.000 0+ decimals Total liabilities Paid-in capital Retained earnings 19.000 Equity 39,000 Total liab. & equity 159,000 Submit 120,000 20.000 BAttempt 1/10 for 10 pts. Part 3 If the company didn't pay any dividends, but used the entire net income to pay back long-term debt, what would be the value of total equity on Dec. 31, 2022? Attempt 1/10 for 10 pts. Part 4 If the company distributed half of its net income as dividends, used the rest to invest in new machines and sold all its marketable securities to pay back some long-term debt, what would be the value of total equity on Dec. 31, 2022? Below is the balance sheet for Glucose Control Company as of Dec. 31, 2021. The company reported an annual net income of $83,000 for the following year, 2022, but did not change its assets or liabilities, unless otherwise noted. Assets Cash 39,000 9.000 Marketable securities 2,000 Accounts receivable 6,000 Inventory 28,000 Current assets 45,000 Machines 34,000 80,000 114,000 159,000 Real estate Fixed assets Total assets 0+ decimals B Attempt 2/10 for 10 pts. Part 1 If the company distributed its entire net income as dividends, what would be the value of total equity on Dec. 31, 2022? Submit 0+ decimals Liabilities and Equity Accounts payable Correct ✓ Since the company pays out all its net income and does not retain any earnings, the value of equity as well as all other balance sheet items are unaffected. The total value of equity is thus still $39,000. Submit Notes payable Current liabilities Long-term debt B Attempt 4/10 for 10 pts. Part 2 If the company distributed half of its net income as dividends and used the rest to invest in new machines, what would be the value of total equity on Dec. 31, 2022? 19,000 6,000 25,000 95.000 0+ decimals Total liabilities Paid-in capital Retained earnings 19.000 Equity 39,000 Total liab. & equity 159,000 Submit 120,000 20.000 BAttempt 1/10 for 10 pts. Part 3 If the company didn't pay any dividends, but used the entire net income to pay back long-term debt, what would be the value of total equity on Dec. 31, 2022? Attempt 1/10 for 10 pts. Part 4 If the company distributed half of its net income as dividends, used the rest to invest in new machines and sold all its marketable securities to pay back some long-term debt, what would be the value of total equity on Dec. 31, 2022?

Answer rating: 100% (QA)

SOLUTION Part 1 If the company distributed its entire net income as dividends what would be the value of total equity on Dec 31 2022 If the company di... View the full answer