Assets	=	Liabilities	+	Common Stock	+	Retained Earnings
Allen	$11,000	=	$7,700	+	$2,640	+	$ 660
White	$16,000	=	$3,840	+	$8,960	+	$3,200

Required a. Based on this information alone, can White pay a $3,800 dividend?

• Yes

• No

b-1. Reconstruct the accounting equation for each company using percentages on the right side of the equation instead of dollar values.

b-2. Which company is more financially stable?

• Allen

• White

c. Assume Allen incurs a $5,300 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?

d. Assume White incurs a $5,300 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?