Consider the Balance Sheet of Wilkes Industries as Shown Below

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