Consider the balance sheet of Wikileaks Industries as shown below. Because Wikileaks has $900,000 of retained earnings, do you think that the company would be able to pay cash to buy an asset with a cost of $300,000? Why or why not? Give logical arguments to support your answer.

Cash $ 50,000 Accounts payable $ 100,000

Inventory 200,000 Accruals 100,000

Accounts receivable 250,000 Total CL $ 200,000

Total CA $ 500,000 Debt 100,000

Net fixed assets $ 900,000 Common stock 200,000

_________ Retained earnings 900,000

Total assets $1,400,000 Total L & E $1,400,000