Answer:
Total assets next year are $186670
Explanation:
The basic accounting equation states that Total assets are always equal to the sum of Total liabilities and total equity. Thus, the total assets of the company this year are,
Total assets - this year = 68188 + (10959 + 86023)
Total assets - this year = $165170
The net income generated by a company is used for two purposes. The company can either pay out dividends from it or retain it in the business or do both. The retained net income will increase the amount of retained earnings and thus the total equity.
Retained earnings for next year = 36500 - 15000 = $21500
Thus, total assets for next year are,
Total assets next year = Total assets this year + change in retained earnings
Total assets next year = 165170 + 21500 = $186670
Answer:
$186,670
Explanation:
As we know the
Total Assets = Total equity + Total Liability
AS we know that the common stock account and retained earning account are equity accounts
Total Assets = ($10,959 + $86,023) + $68,188
Total Assets = $165,170
Retained Earning is the accumulated balance of all the prior year's income / losses after paying all the dividend. This balance can be used for the dividend payment or reinvestment in the business.
Balance of Retained Earning = $86,023
Net Income = $36,500
Dividend Payment = $15,000
As we know net income is added to the retained earning and net loss is deducted. Dividend is the payment of earning of the company to stockholders so, it is deducted from it.
New balance of Retained Earning = $86,023 + $36,500 - $15,000 = $107,523
Now we need to calculate total assets
Total Assets = ($10,959 + $107,523) + $68,188 = $186,670
