Roosevelt Inc., a consulting service, has a history of paying annual dividends of $1 per share. Management is trying to determine whether the company will have adequate cash on December 31, 2011, to pay a dividend if one is declared by the board of directors. The following additional information is available:
All sales are on account, and accounts receivable are collected one month after the sale. Sales volume has been decreasing 5% each month.
Operating expenses are paid in cash in the month incurred. Average monthly expenses are $10,000 (excluding the biweekly payroll).
Biweekly payroll is $4,500, and it will be paid December 15 and December 31.
Unearned revenue is expected to be earned in December. This amount was taken into consideration in the expected sales volume.

Required
Determine the cash that Roosevelt will have available to pay a dividend on December 31, 2011. Round all amounts to the nearest dollar. Should management recommend that the board of directors declare a dividend? Explain.

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Roosevelt Inc. Balance Sheet December 1, 2011 Cash Accounts receivable Computer equipment S 15,000 40,000 120,000 Unearned revenue Note payable Common stock-$2 par Retained earnings $ 2,000 30,000 50,000 93,000 Total liabilities and Total assets $175,000 stockholders' equity $175,000 The note payable plus 3% interest for six months is due January 15, 2012.