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24 January, 08:38

The Baldwin company currently has the following balances on their balance sheet: Assets $180,506 Common Stock $11,365 Retained earnings $92,472 Suppose next year the Baldwin Company generates $20,000 in net profit, pays $10,000 in dividends, assets change to $151,000, and common stock remains unchanged. What must their total liabilities be next year?

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  1. 24 January, 09:24
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    The total liabilities for the next year amount to 37163 $.

    Explanation:

    To calculate the liability we will use the simple equation given below.

    Asset-equity=liability

    Assets-RE=Liability

    Current year Change * Next Year

    Assets 180,506.00 29,506.00 151,000.00

    Common Stock (11,365.00) 0 (11,365.00)

    Retain Earning (92,472.00) (10,000.00) (102,472.00)

    Liability - BaL figure 76,669.00 37,163.00

    *Retain earning = Net profit - dividend

    Hence balancing figure that is 37,163 dollars is liabilty for next year,
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Home » Business » The Baldwin company currently has the following balances on their balance sheet: Assets $180,506 Common Stock $11,365 Retained earnings $92,472 Suppose next year the Baldwin Company generates $20,000 in net profit, pays $10,000 in dividends, assets
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