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

Question

The Davidson Corporation's balance sheet and income statement are provided here Davidson Corporation: Balance Sheet as of December 31, 2018 (Millions of Dollars) Liabilities and Equity Assets Cash and equivalents Accounts receivable Inventories $ 10 Accounts payable $140 240 220 $600 1,500 $ 2,100 240 $ 1,500 $ 1,740 $ 3,840 510 Accruals 810 Notes payable Total current assets $1,330 Total current liabilities Net plant and equipment 2,510 Long-term bonds Total liabilities Common stock (100 million shares) Retained earnings Common equity Total assets $3,840 Total liabilities and equity

Explanation / Answer

a)

working Note-

b) The Amount of $ 1,500 Million is reinvested in the Firm over the years. This Amount is equal to Retained earnings balance as on end of the year.

c)In order to find out the amount of check we can give without bouncing then we need to calculate the balance of cash and its equivalents.

So Answer is $10 Million.

d)The Firm has to pay all its current liabilites within the next year.

So the Answer is $ 600 Million.

Common Stock Shares Amount Retained Earnings Total Stockholders equity Balance 12/13/17 100,000,000 $ 240,000,000.00 $ 1,153,252,500.00 $                1,393,252,500.00 2018 Net Income $ 1,260,900,000.00 Cash Dividends $    (914,152,500.00) Addition to RE $                    346,747,500.00 Balance 12/13/18 100,000,000 $ 240,000,000.00 $ 1,500,000,000.00 $                1,740,000,000.00

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