At the most recent strategic planning meeting , the board of directors of your company has voted to issue additional stock to raise capital for major expansions for the company in the next five years . The board is considering issuing a total amount of stock worth $ 5 million . The CEO has asked you to analyze the impact of issuing this stock on the income statement , statement of retained earnings , balance sheet , and cash flow statement . Take the most recent financial statements and prepare a set of projected financial statements based on the given assumptions
Specifically , the following critical elements must be addressed :
I . Stockholders ’ Equity
A . Determine how your company got its initial financial start in terms of debt ( liabilities ) or equity ( capital ). Support your response .
B . Analyze the equity section of your company ’ s balance sheet as compared to your company ’ s industry average . Rate the company ’ s performance against its competitors .
C . Review your company ’ s dividend policy and its history . Based on the information , discuss the trends over the past year
II . Income Measurement / Revenue Recognition
A . Financial Accounting Standards Board ( FASB ) and the International Accounting Standards Board ( IASB ) came together on a unified project to outline the accounting principles for recognizing revenue and to develop a common revenue standard for U . S . GAAP and IFRS . Research IAS-18 ,
Revenue , and discuss how it would apply to your company .