Consider the Following Balance Sheet for Games Inc

question 36

True/False

Consider the following balance sheet for Games Inc.Because Games has $800,000 of retained earnings,we know that the company would be able to pay cash to buy an asset with a cost of $200,000. $\begin{array}{llll}\text { Cash } & \$ 50,000 & \text { Accounts payable } & \$ 100,000 \\\text { Inventory } & \$ 200,000 & \text { Accruals } & \$ 100,000 \\\text { Accounts receivable } & \$ 250,000 & \text { Total CL } & \$ 200,000\\\text { Total CA } & \$ 50,000 & \text { Long-term debt } & \$ 200,000 \\\text { Net fixed assets } & \$ 900,000 & \text { Common stock } & \$ 200,000 \\& & \text { Retained earnings } & \$ 800,000\\\text { Total assets }&\$1,400,000&\text { Total L \& E }&\$1,400,000\end{array}$
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