Salashar,Inc.'s balance sheet is as follows:

Salashar decides to pay a dividend.Which of the following statements is MOST correct?
A) The dividend cannot exceed $1,000,000, the amount of cash available.
B) The dividend cannot exceed $1,700,000, the amount of net working capital.
C) The dividend cannot exceed $600,000, the amount of retained earnings.
D) The dividend cannot exceed $11,000,000, the amount of total assets.

Question

Salashar,Inc.'s balance sheet is as follows:

Salashar decides to pay a dividend.Which of the following statements is MOST correct?
A) The dividend cannot exceed $1,000,000, the amount of cash available. 
B) The dividend cannot exceed $1,700,000, the amount of net working capital. 
C) The dividend cannot exceed $600,000, the amount of retained earnings. 
D) The dividend cannot exceed $11,000,000, the amount of total assets.

Quizplus · Accepted Answer

The Answer of Salashar,Inc.'s balance sheet is as follows:

Salashar decides to pay a dividend.Which of the following statements is MOST correct?
A) The dividend cannot exceed $1,000,000, the amount of cash available. 
B) The dividend cannot exceed $1,700,000, the amount of net working capital. 
C) The dividend cannot exceed $600,000, the amount of retained earnings. 
D) The dividend cannot exceed $11,000,000, the amount of total assets.

Salashar,Inc.'s Balance Sheet Is as Follows