Question

The Baldwin Company currently has the following balances on their balance sheet: Total Assets $256,555 Total Liabilities $149,320 Retained Earnings $49,793 Suppose next year the Baldwin Company generates $44,200 in net profit, pays $12,000 in dividends, total assets increase by $55,000, and total liabilities remain unchanged. What will ending Baldwins balance in Common Stock be next year

Answer 1

Answer: $80,242

Step-by-step explanation:

Common stock = Assets - Liabilities - Retained earnings

Assets next year = 256,555 + 55,000

= $311,555

Liabilities remain unchanged.

Retained earnings

= Opening retained earnings + Net income - dividends

= 49,793 + 44,200 - 12,000

= $‭81,993‬

Common stock next year;

= 311,555 - 149,320 - 81,993

= $80,242