Chapter 3, Problem 16P

a.

Summary Introduction

To prepare: The statement of stockholders’ equity for December 31, 2015.

Financial Statements: A part of annual report that is attributed to the financials of the company for an accounting period is called financial statements. These include income statement, statement of retained earnings, balance sheet and cash flow statement.

Statement of Stockholders’ Equity: Statement of stockholders’ equity reports the opening and closing balance of stockholder’s equity with the changes incurred during the accounting period.

b.

Summary Introduction

To identify: The amount reinvested in the firm over the years.

Retained Earnings: The companies retain some portion of their net income to support the business operations, expansion plans and other long term assets. That remaining portion of a company’s net incomes is called retained earnings.

c.

Summary Introduction

To identify: The maximum amount of check that could be written and cleared.

d.

Summary Introduction

To determine: The amount needs to be paid to creditors within the next year.