Question

Baldwin's balance sheet has $69,503,000 in equity. Next year they expect Assets to increase by $4,000,000...

Baldwin's balance sheet has $69,503,000 in equity. Next year they expect Assets to increase by $4,000,000 and Liabilities to decrease by $2,000,000. If that happens, what will be Baldwin's book value? Select: 1

$33,320,000

$75,502,000

$71,502,000

$63,503,00

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Answer #1

Increase in Assets = Decrease in Liabilities + Increase in Equity
$4,000,000 = -$2,000,000 + Increase in Equity
Increase in Equity = $6,000,000

Equity, Net Year = Equity, Current Year + Increase in Equity
Equity, Net Year = $69,503,000 + $6,000,000
Equity, Net Year = $75,503,000

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