The Baldwin Company currently has the following balances on

The Baldwin Company currently has the following balances on their balance sheet: Total Assets $235,410 Total Liabilities $143,939 Retained Earnings $37,374 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?

Select: 1

$76,897

$471,723

$364,775

$141,297

Solution

The answer is \"$76,897\"

Next year retained earnings = 37,374 + 44,200 - 12,000 = $69,574

Next year total assets = 235,410 + 55,000 = $290,410

Nest year liabilities will remain unchanged. So, Total liabilities = $143,939

So, next year common stock

= (total assets - total liabilities) - retained earnings

= (290,410 - 143,939) - 69,574 = $76,897