The balance sheet of Lamont Bros, follows. Assets Liabilities and Stockholders’ 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 liabilities and Total assets $400,000 stockholders’ equity $400,000 ’) REQUIRED:

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.

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.

c. In most states, to what dollar amount of dividends would the company be limited?