Question

Fitbit, Inc., reported the following information for the nine-month period ended October 1, 2016. Items are in thousands of dollars.

Accounts Payable	$	519,700
Accounts Receivable		461,600
Advertising Expense		80,100
Cash (January 1, 2016)		664,700
Cash (October 1, 2016)		675,130
Common Stock		832,200
Equipment		255,700
Office Expenses		114,200
Income Tax Expense		18,600
Interest Expense		2,900
Inventories		215,300
Notes Payable		54,000
Operating Expenses		263,400
Retained Earnings (January 1, 2016)		260,600
Sales Revenue		507,130
Supplies		86,700

Other cash flow information:
Cash received from issuing common stock	$	39,430
Cash paid to purchase equipment		67,100
Cash paid to suppliers and employees		489,000
Cash received from customers		526,700
Cash received from sale of long-term assets		400
Dividends paid to stockholders		0

What amount of total assets have been financed by the creditors and the stockholders? (Enter your answers in thousands.)

Was the company financed mainly by creditors or stockholders?

What is your information source?

Was the stockholders’ equity at October 1, 2016, comprised more of contributions made by stockholders directly to the company or amounts earned and retained through profitable business operations?

What is your information source?

Answer 1

Fitbit, Inc.
Income Statement
For the nine-month period ended October 1, 2016
Sales Revenue		507,130
Less: Expenses
Advertising Expense	80,100.00
Operating Expenses	263,400
Office Expenses	114,200
Income Tax Expense	18,600
Interest Expense	2,900
Total Expenses		479,200.00
Net Income		27,930.00
Fitbit, Inc.
Statement Of Retained Earnings
Beginning RE	260,600.00
Add: Net Income	27,930.00
Less: Dividend	0
Ending RE	288,530.00
Fitbit Inc.
Balance Sheet
Assets
Cash	675,130
Accounts Receivable	461,600
Inventories	215,300
Supplies	86,700
Equipment	255,700
Total Assets	1,694,430
Liabilities
Accounts Payable	519,700
Notes Payable	54,000
Total Liabilities	573,700
Stockholders' Equity
Common Stock	832,200
Retained Earnings	288,530.00
Total Stockholders' Equity	1,120,730.00
Total Liabilities & Stockholders' Equity	1,694,430.00
a) What amount of total assets have been financed by the creditors and the stockholders?
Financed by Creditors	573,700
Financed by Stockholders	1,120,730.00
Was the company financed mainly by creditors or stockholders?
Stockholders
What is your information source?
Balance sheet
Fitbit Inc.'s $288,530 of retained earnings at October 1, 2016, arises primarily from its current year earnings ($27,930) as opposed to its retained earnings from prior years 260,600. This information is presented on the statement of retained earnings