The Davidson Corporation's balance sheet and income statement are provided below. Please answer the following questions:

a. Construct the statement of stockholders’ equity for December 31, 2016. No common stock was issued during 2016.

b. How much money has been reinvested in the firm over the years?

c. At the present time, how large a check could be written without it bouncing?

d. How much money must be paid to current creditors within the next year?

PLEASE SHOW ALL OF YOUR WORK and FORMULAS FOR HOW YOU ARRIVED AT YOUR ANSWERS.

Balance Sheet as of December 31, 2016 (Millions of Dollars)

Assets

Liabilities and Equity

Cash and equivalents

$15



Accounts payable

$120

Accounts receivable

515



Accruals

280

Inventories

880



Notes payable

220

Total current assets

$1,410



Total current liabilities

$620

Net plant and equipment

2,590



Long-term bonds

1,520



Total liabilities

$2,140



Common stock (100 million shares)

260



Retained earnings

1,600



Common equity

$1,860

Total assets

$4,000



Total liabilities and equity

$4,000

Income Statement for Year Ending December 31, 2016 (Millions of Dollars)

Sales

$6,250

Operating costs excluding depreciation and amortization

5,230

EBITDA

$1,020

Depreciation and amortization

220

EBIT

$800

Interest

180

EBT

$620

Taxes (40%)

248

Net income

$372

Common dividends paid

$146

Earnings per share

$3.72