Consider the following balance sheet, for Moziah business. will his company be able to pay cash to buy an asset with a cost of $400,000 knowing they have $1,600,000 in retained earnings? If not, how will they be able to buy those assets? $ 100,000 Accounts payable $ 200,000 Cash Inventory Accounts receivable 400,000 Accruals 200,000 500,000 Total CL $400,000 Total CA $1,000,000 Debt 400,000 Net fixed assets $,1800,000 Common stock 400,000 Retained earnings 1,600,000 Total assets $2,800,000 Total L & E $2,800,000 OU
Consider the following balance sheet, for Moziah business. will his company be able to pay cash to buy an asset with a cost of $400,000 knowing they have $1,600,000 in retained earnings? If not, how will they be able to buy those assets? $ 100,000 Accounts payable $ 200,000 Cash Inventory Accounts receivable 400,000 Accruals 200,000 500,000 Total CL $400,000 Total CA $1,000,000 Debt 400,000 Net fixed assets $,1800,000 Common stock 400,000 Retained earnings 1,600,000 Total assets $2,800,000 Total L & E $2,800,000 OU
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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please answer in details within 30 minutes.

Transcribed Image Text:Consider the following balance sheet, for Moziah business. will his company be able to pay
cash to buy an asset with a cost of $400,000 knowing they have $1,600,000 in retained
earnings? If not, how will they
be able to buy those assets?
Cash
$ 100,000
Accounts payable
$ 200,000
Inventory
400,000
Accruals
200,000
Accounts receivable
500,000
Total CL
$ 400,000
Total CA
$1,000,000
Debt
400,000
Net fixed assets
$,1800,000
Common stock
400,000
Retained earnings
1,600,000
Total assets
$2,800,000
Total L & E
$2.800,000
no
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