Ch $03-$ End$-$of$-$Chapter Problems $-$ Financial Statements, Cash Flow, and Taxes

The Davidson Corporation's balance sheet and income statement are provided here.

Davidson Corporation: Balance Sheet as of December $31,2021$

$($millions of dollars$)$

$\backslash$table$[[$Assets$,,,$Liabilities and Equity,,$],[$Cash and equivalents,$$,20,$Accounts payable,$$,120],[$Accounts receivable,,$490,$Accruals,,$280],[$Inventories$,,920,$Notes payable,,$225],[$Total current assets,$$,1,430,$Total current liabilities,$$,625],[$Net plant and equipment,,$2,345,$Long$-$term bonds,,$1,510],[,,,$Total liabilities,,$2,135],[,,,$Common stock $(100$ million shares$),,240],[,,,$Retained earnings,$$,1,400],[,,,$Common equity,,$1,640],[$Total assets,$$,3,775,$Total liabilities and equity,$$,3,775]]$

Davidson Corporation: Income Statement for Year Ending

December $31,2021($millions of dollars$)$

Sales

Operating costs excluding depreciation and amortization

EBITDA

Depreciation and amortization

EBIT

Interest

EBT

Taxes $(25\%)$

Net income

Common dividends paid

Earnings per share

$\backslash$table$[[$$$,7,000],[,5,680],[$$$,1,320],[,390],[$$$,930,],[,150],[$$$,780],[,195],[$$$,585],[$$$,240],[$$$,5\mathrm{.}85]]$

a$.$ Construct the statement of stockholders' equity for December $31,2021.$ No common stock was issued during $2021.$ Wr million should be entered as $25,000,000.$ Round your answers to the nearest share or dollar.

Common Stock

Retained

Balances, $12/31/20$

$\backslash$table$[[$Shares$,$Amount,Retained,$],[100,000,000,$$$,240,000,00,$Earnings$]]$

$03-$ End$-$of$-$Chapter Problems $-$ Financial Statements, Cash Flow, and Taxes

$($i$)$

$\backslash$table$[[$BIT$,$$$,930],[$iterest$,,150],[$BT$,$$$,780],[$axes $(25\%),,195],[$et income,$$,585],[$mon dividends paid,$$,240],[$nings per share,$$,5\mathrm{.}85]]$

a$.$ Construct the statement of stockholders' equity for December $31,2021.$ No common stock was issued during $2021.$ 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

Earnings

Balances, $\frac{12}{31}\frac{?}{20}$

$2021$ Net income

Cash dividends

Addition to RE

Balances, $\frac{12}{31}\frac{?}{21}$

Enter your answers for parts b$-$d in millions. For example, an answer of $$25,000,000$ should 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 million, if necessary.

$ $$ million

c$.$ At the present time, how large a check could be written without it bouncing? Round your answer to the nearest hundredth 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