Question

Fitbit, Inc., reported the following information for the nine-month period ended October 1, 2016. Items are in thousands of dollars. Accounts Payable $ 521,100 Accounts Receivable 463,000 Advertising Expense 81,500 Cash (January 1, 2016) 666,100 Cash (October 1, 2016) 689,270 Common Stock 839,200 Equipment 257,100 Office Expenses 115,600 Income Tax Expense 20,000 Interest Expense 4,300 Inventories 216,700 Notes Payable 55,400 Operating Expenses 264,800 Retained Earnings (January 1, 2016) 262,000 Sales Revenue 522,670 Supplies 88,100 Other cash flow information: Cash received from issuing common stock $ 39,570 Cash paid to purchase equipment 68,500 Cash paid to suppliers and employees 490,400 Cash received from customers 540,700 Cash received from sale of long-term assets 1,800 Dividends paid to stockholders 0 Required: 1-a. What amount of total assets have been financed by the creditors and the stockholders? (Enter your answers in thousands.) 1-b. Was the company financed mainly by creditors or stockholders? Creditors Stockholders 1-c. What is your information source? Income Statement Statement of Retained Earnings Balance Sheet Statement of Cash Flows

Answer 1

	Required 1-a.	Total asset financed by creditors and stock holders are as follows
		Particulars	Amount $	Remarks
		Creditors	1,137,670	Refer below balance sheet for the details
		Stockholders	576,500	Refer below balance sheet for the details
		Total assets	1,714,170
	Required 1-b.	The Company is mainly financed by the Stock holder as per the details given above
	Required 1-c.	Information source to answer the above question is balance sheet, income statement and retained earning
		Fitbit Inc.
		Income Statement
		For the period ended 01 October 2016
		Particulars	Amount $
		Revenue
		Sales revenue	522,670
		Total Revenue	522,670
		Expenses
		Operating expenses	264,800
		Rent expenses
		Depreciation expenses
		Office expenses	115,600
		Bad debt expenses
		Interest expenses	4,300
		Advertising expenses	81,500
		Income tax expenses	20,000
		Total Expenses	486,200
		Net Income for the current period	36,470
		Fitbit Inc.
		Retained earning statement
		At October 01, 2016
		Particulars	Amount $
		Opening balance	262,000
		Add;- Profit for the year	36,470
		Less:- Dividend paid	-
		Closing retained earning	298,470
		Fitbit Inc.
		Balance sheet
		At October 01, 2016
		Liabilities	$	Assets	$
		Common stock	839,200	Equipment	257,100
		Retained earning	298,470
		Notes Payable	55,400	Accounts receivable	463,000
		Accounts Payable	521,100	Inventories	216,700
				Supplies	88,100
				Cash	689,270
		Total	1,714,170	Total	1,714,170	-
		Fitbit Inc.
		Statement of cash flow
		For the period ended 01 October 2016
		Cash flow from operating activities
		Cash Received from:-
		Customer	540,700
		Cash paid to:-
		Supplier and employees	(490,400)
		Net cash flow from operating activities (A)	50,300
		Cash flow from investing activities
		Purchase of equipment	(68,500)
		Sale of asset	1,800
		Cash flow from investing activities (B)	(66,700)
		Cash flow from financing activities
		Issue of common stock	39,570
		Dividend paid	-
		Net cash flow from financing activities(C)	39,570
		Net Changes in cash and cash equivalents (A+B+C)	23,170
		Opening cash balance	666,100
		Closing cash balance	689,270