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FINANCIAL ACCOUNTING

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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3. Consider the balance sheet of Wilkes Industries as shown below. Because Wilkes has $800,000 of retained
earnings, the company would be able to pay cash to buy an asset with a cost of $200,000.
$
$
Cash
Inventory
Accounts receivable
Total CA
Net fixed assets
Total assets
50,000
200,000
250,000
$ 500.000
$ 900,000
$1.400.000
Accounts payable
Accruals
Total CL
Debt
Common stock
Retained earnings
Total L & E
100,000
100,000
$ 200,000
200,000
200,000
800,000
$1.400.000

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