Explore BrainMass

Explore BrainMass

    Calculating Total Assets

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    The Baldwin Company currently has the following balances on their balance sheet:

    Total Liabilities $138,888
    Common Stock $55,651
    Retained Earnings $43,516

    Suppose next year the Baldwin Company generates $36,500 in net profit and pays $15,000 in dividends and total liabilities and common stock remain unchanged. What must their total assets be next year?

    © BrainMass Inc. brainmass.com June 4, 2020, 4:48 am ad1c9bdddf


    Solution Preview

    Next year, Baldwin Company's increase in Retained Earnings is:
    Net profit - Dividends = $36,500 - $15,000 = $21,500

    Hence, next year's Retained Earnings = ...

    Solution Summary

    This solution involves calculating the total assets liability common stock.