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The financial condition of White Co. Inc. is expressed in the following accounting equation:



Assets = Liabilities + Common Stock + Retained Earnings
$1,800 Cash + $12,000 Land = $6,000 + $5,000 + $2,800


Required

Are dividends paid to creditors or investors?

How much cash is in the Retained Earnings account?

Determine the maximum dividend White Co. Inc. can pay.

If the obligation to creditors is due, can White Co. Inc. repay the loan?

Suppose the land sinks into the sea as a result of an earthquake and a resulting tsunami. The business is then liquidated. How much cash will creditors receive? How much cash will investors receive? (Assume there are no legal fees or other costs of liquidation.)

The Financial Condition Of White Co Inc Is Expressed In The Following Accounting Equation Assets Liabilities Common Stock Retained Earnings 1800 Cash 12000 Land class=

Sagot :

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