Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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. (minimum 250 words)

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions