Assets = Liabilities + Common Stock + Retained Earnings

$11,200 = $7,840 + $2,240 + $1,120 Allen

$16,000 = $3,360 + $8,000 + $4,640 White

a. Based on this information alone, please explain why White cannot pay a $2,800 dividend even though its less than the retained earnings amount. Why he cannot pay a $2,800 dividend, is it because we don't know what the retained earnings consists of?

c. Assume Allen incurs a $5,200 operating loss. The remaining assets are sold for the value shown on the books, and the cash proceeds are distributed to the creditors and investors. How much money will be paid to creditors and how much will be paid to investors?

amount to creditors =

amount to investors =

d. Assume White incurs a $5,200 operating loss. The remaining assets are sold for the value shown on the books, and the cash proceeds are distributed to the creditors and investors. How much money will be paid to creditors and how much will be paid to investors?

amount to creditors =

amount to investors =