Week #11 Responses

Directions: Use the balance sheet and income statement for Waygos Inc. to answer each of the following questions:
Name: 


  1. What was the total value of all the assets that Waygos owned at the end of the year?



  1. What was the total value of stockholders’ ownership at the end of the year?



  1. Explain why the amount in your answer for question 2 is less than the amount in your answer to question 1.


  1. How much profit did Waygos earn according to its income statement?



  1. The company is a new, small business with promising growth prospects. For this reason, it has been reinvesting all its yearly earnings in its growth. Suppose, instead, the company had
    paid all of its latest profit to stockholders as a dividend. Would the dividend have affected retained earnings as reported on the company’s balance sheet? Explain.



  1. Suppose in the coming year, Waygos reports a net loss, instead of a net income, on its income statement. How would this event affect retained earnings on its balance sheet? How would it affect stockholders’ equity?


  1. The following information presents the net income (or loss) of Waygos Inc. over its first five years of business. Calculate the net income per share (earnings per share) for each year. Does this information tell you anything about the health of Waygos over the last few years? Do you think the company’s stock price has been rising or falling? Explain.






Mrs. Stevenson
Marquette Senior High School
MI