Turner Company reported assets of $20,000 (including cash of $9,000), liabilities of $8,000, common stock of $7,000, and retained earnings of $5,000. Based on this information, what can be concluded?
A. 25% of Turner's assets are from prior earnings, $5,000 is the maximum possible dividend, and 40% of assets are the result of borrowed resources.
B. 25% of Turner's assets are the result of prior earnings.
C. 40% of Turner's assets are the result of borrowing from creditors.
D. $5,000 is the maximum dividend that can be paid to shareholders.
Answer: A
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