The statement of stockholders' equity:
a. is used only if a corporation frequently issues commonstock.
b. is one of the required financial statements for the annualreport, when changes have occurred in the stockholders' equityaccounts.
c. shows the changes in retained earnings for the period, whichincludes the increase or decrease as a result of net income or lossfor the period, and dividends for the period.
d. includes accounts, such as the retained earnings and commonstock accounts, but not changes to the retained earnings account,since those items are reported on the statement of retainedearnings.
The statement of stockholders' equity:
a. is used only if a corporation frequently issues commonstock.
b. is one of the required financial statements for the annualreport, when changes have occurred in the stockholders' equityaccounts.
c. shows the changes in retained earnings for the period, whichincludes the increase or decrease as a result of net income or lossfor the period, and dividends for the period.
d. includes accounts, such as the retained earnings and commonstock accounts, but not changes to the retained earnings account,since those items are reported on the statement of retainedearnings.
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Related questions
Missing Amounts from Financial Statements
The financial statements at the end of Atlas Realty's firstmonth of operations follow:
Required:
Analyze the interrelationships among the four financialstatements and enter the missing amounts. If an amount is zero,enter "0".
| AtlasRealty | ||
| IncomeStatement | ||
| For the MonthEnded May 31, 2018 | ||
| Fees earned | $400,000 | |
| Expenses: | ||
| Wages expense | $ | |
| Rent expense | 48,000 | |
| Supplies expense | 17,600 | |
| Utilities expense | 14,400 | |
| Miscellaneous expense | 4,800 | |
| Total expenses | 288,000 | |
| Net income | $ | |
| AtlasRealty | ||
| RetainedEarnings Statement | ||
| For the MonthEnded May 31, 2018 | ||
| Retained earnings, May 1, 2018 | $ | |
| Net income | $ | |
| Dividends | ||
| Change in retained earnings | ||
| Retained earnings, May 31, 2018 | $ | |
| AtlasRealty | ||
| BalanceSheet | ||
| May 31,2018 | ||
| Assets | ||
| Cash | $123200 | |
| Supplies | 12,800 | |
| Land | ||
| Total assets | $ | |
| Liabilities | ||
| Accounts payable | $48,000 | |
| Stockholdersâ Equity | ||
| Common stock | $ | |
| Retained earnings | ||
| Total stockholders' equity | ||
| Total liabilities and stockholdersâequity | $ | |
Use the minus sign to indicate cash outflows, decreases in cash,and cash payments.
| AtlasRealty | ||
| Statement ofCash Flows | ||
| For the MonthEnded May 31, 2018 | ||
| Cash flows from operating activities: | ||
| Cash received from customers | $ | |
| Cash payments for expenses and payments tocreditors | -252,800 | |
| Net cash flows from operatingactivities | $ | |
| Cash flows from investing activities: | ||
| Cash payments for acquisition of land | -120,000 | |
| Cash flows from financing activities: | ||
| Cash received from issuing commonstock | $160,000 | |
| Cash dividends | -64,000 | |
| Net cash flows from financingactivities | ||
| Net increase (decrease) in cash and May 31,2018, cash balance | $ | |
You have just been hired as a financial analyst for LydexCompany, a manufacturer of safety helmets. Your boss has asked youto perform a comprehensive analysis of the companyâs financialstatements, including comparing Lydexâs performance to its majorcompetitors. The companyâs financial statements for the last twoyears are as follows:
| Lydex Company Comparative Balance Sheet | ||||
| This Year | Last Year | |||
| Assets | ||||
| Current assets: | ||||
| Cash | $ | 970,000 | $ | 1,210,000 |
| Marketable securities | 0 | 300,000 | ||
| Accounts receivable, net | 2,740,000 | 1,840,000 | ||
| Inventory | 3,610,000 | 2,100,000 | ||
| Prepaid expenses | 260,000 | 200,000 | ||
| Total current assets | 7,580,000 | 5,650,000 | ||
| Plant and equipment, net | 9,540,000 | 9,060,000 | ||
| Total assets | $ | 17,120,000 | $ | 14,710,000 |
| Liabilities andStockholders' Equity | ||||
| Liabilities: | ||||
| Current liabilities | $ | 4,020,000 | $ | 3,000,000 |
| Note payable, 10% | 3,680,000 | 3,080,000 | ||
| Total liabilities | 7,700,000 | 6,080,000 | ||
| Stockholders' equity: | ||||
| Common stock, $70 par value | 7,000,000 | 7,000,000 | ||
| Retained earnings | 2,420,000 | 1,630,000 | ||
| Total stockholders' equity | 9,420,000 | 8,630,000 | ||
| Total liabilities andstockholders' equity | $ | 17,120,000 | $ | 14,710,000 |
| Lydex Company Comparative Income Statement and Reconciliation | ||||
| This Year | Last Year | |||
| Sales (all on account) | $ | 15,870,000 | $ | 13,680,000 |
| Cost of goods sold | 12,696,000 | 10,260,000 | ||
| Gross margin | 3,174,000 | 3,420,000 | ||
| Selling and administrativeexpenses | 1,106,000 | 1,608,000 | ||
| Net operating income | 2,068,000 | 1,812,000 | ||
| Interest expense | 368,000 | 308,000 | ||
| Net income before taxes | 1,700,000 | 1,504,000 | ||
| Income taxes (30%) | 510,000 | 451,200 | ||
| Net income | 1,190,000 | 1,052,800 | ||
| Common dividends | 400,000 | 526,400 | ||
| Net income retained | 790,000 | 526,400 | ||
| Beginning retained earnings | 1,630,000 | 1,103,600 | ||
| Ending retained earnings | $ | 2,420,000 | $ | 1,630,000 |
To begin your assignment you gather the following financial dataand ratios that are typical of companies in Lydex Companyâsindustry:
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