Consider the following balance sheet, for easy lunchbox. will the company be able to pay cash to buy an asset with a cost of $200,000 knowing they have $800.000 in retained earnings? Cash                                          $   50,000            Accounts payable                      $ 100,000Inventory                                      200,000            Accruals                                       100,000Accounts receivable                     250,000            Total CL                                    $ 200,000Total CA                                   $ 500,000            Debt                                             200,000Net fixed assets                         $ 900,000            Common stock                             200,000                                                                              Retained earnings                        800,000Total assets     $1,400,000      Total L & E     $1,400,000

Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter12: Corporate Valuation And Financial Planning
Section: Chapter Questions
Problem 7P: Upton Computers makes bulk purchases of small computers, stocks them in conveniently located...
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Consider the following balance sheet, for easy lunchbox. will the company be able to pay cash to buy an asset with a cost of $200,000 knowing they have $800.000 in retained earnings? Cash                                          $   50,000            Accounts payable                      $ 100,000Inventory                                      200,000            Accruals                                       100,000Accounts receivable                     250,000            Total CL                                    $ 200,000Total CA                                   $ 500,000            Debt                                             200,000Net fixed assets                         $ 900,000            Common stock                             200,000                                                                              Retained earnings                        800,000Total assets     $1,400,000      Total L & E     $1,400,000
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