Debt, contributed and earned capital, and the classification of preferred stock ________________________________________ The balance sheet of Lamont Bros. follows: ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY Current assets $ 85,000 Current liabilities $ 52,000 Noncurrent assets 315,000 Long-term note payable 35,000 Preferred stock 50,000 Common stock 80,000 Additional paid-in capital: Preferred stock 50,000 Common stock 100,000 Retained earnings 113,000 Less: Treasury stock (80,000) Total assets $400,000 Total liabilities and shareholders' equity $400,000 1. a. What portions of Lamont's assets were provided by debt, contributed capital, and earned capital? Reduce contributed capital by the cost of the treasury stock. 2. b. Compute the company's debt/equity ratio. Compute the debt/equity ratio if the preferred stock issuance was classified as a long-term debt. 3. c. In most states, to what dollar amount of dividends would the company be limited?