Consider the Balance Sheet of Wilkes Industries as Shown Below

question 64

True/False

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.
$\begin{array}{lll}\text { Cash } & \$ 50,000 \text { Accounts payable } & \$ 100,000 \\\text { Inventory } & 200,000 \text { Accruals } & 100,000\\\text {Accounts receivable } & \text { 250,000 Total CL } & \$ 200,000\\\text { Total CA } & \$ 500,000 \text { Debt } & 200,000 \\\text { Net fixed assets } & \$ 900,000 \text { Common stock } & 200,000\\\ &\ \text { ----------Retained earnings } & 800,000\\\text { Total assets} & \$1,400,000 \text { Total L \& E } & \$1,400,000\\\end{array}$

Analyze percentage increases in financial elements.

Determine gross profit on sales.

Compute acid-test ratios and understand their implications.

Analyze the relationship between net income and net sales.

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