High School

Andrews Company currently has the following balances in their liability and equity accounts:

- Total Liabilities: $141,131,673
- Common Stock: $13,308,000
- Retained Earnings: -$15,913,397

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

A. $160,026,276
B. -$15,913,397
C. $190,026,276
D. $138,526,276

Answer :

Final answer:

The total assets of Andrews Company for the next year must be $138,526,276.

Explanation:

To calculate the total assets of Andrews Company for the next year, we need to use the equation: Total Assets = Total Liabilities + Equity.

From the given information, we know that the total liabilities are $141,131,673 and the equity consists of common stock and retained earnings. The common stock is $13,308,000 and the retained earnings are -$15,913,397.

Using the equation, we can calculate the total assets as follows:

Total Assets = $141,131,673 + ($13,308,000 + (-$15,913,397))

Simplifying the equation, we get:

Total Assets = $141,131,673 - $2,605,397

Total Assets = $138,526,276

Therefore, the total assets of Andrews Company for the next year must be $138,526,276.

Learn more about calculating total assets here:

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