Salashar, Inc.'s balance sheet is as follows:
Cash $1,000,000 Current Liabilities $1,300,000
Other Current Assets $2,000,000 Long-term Debt $4,100,000
Long-term Assets $8,000,000 Common Stock $5,000,000
Retained Earnings $600,000
Total Assets $11,000,000 Total Liab. And Equity $11,000,000
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 $600,000, the amount of retained earnings.
C) The dividend cannot exceed $11,000,000, the amount of total assets.
D) The dividend cannot exceed $1,700,000, the amount of net working capital.
B
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