Effect of net income on a firm's balance sheet Conrad Air, Inc., reported net income of $1,372,000 for the year ended December 31, 2022. Show how Conrad's balance sheet would change from
2021 to 2022 depending on how Conrad "spent those earnings as described in the scenarios that appear below.
a. Conrad paid no dividends during the year and invested the funds in marketable securities.
b. Conrad paid dividends totaling $501,000 and used the balance of the net income to retire (pay off) long-term debt.
c. Conrad paid dividends totaling $501,000 and invested the balance of the net income in building a new hangar.
a. If Conrad paid no dividends during the year and invested the funds in marketable securities, the amount transferred to the balance sheet will be _____ $ (Round to the nearest dollar.)
The revised marketable securities will be ______$ (Round to the nearest dollar.)
The revised retained earnings will be $_______ (Round to the nearest dollar.)
b. If Conrad paid dividends totaling $501,000 and used the balance of the net income to retire (pay off) long-term debt, the amount transferred to the balance sheet will be $_______ (Round to the
nearest dollar.)
The revised long-term debt will be $_______
The revised retained earnings will be $ ________
(Round to the nearest dollar.)
(Round to the nearest dollar.)
c. If Conrad paid dividends totaling $501,000 and invested the balance of the net income in building a new hangar, the amount transferred to the balance sheet will be ________$ (Round to the nearest dollar.)
The revised buildings will be _________$ (Round to the nearest dollar.)
The revised retained earnings will be _________$ (Round to the nearest dollar.)
