Last year the Baldwin company increased their equity. In 2017 their equity was $
ID: 2394340 • Letter: L
Question
Last year the Baldwin company increased their equity. In 2017 their equity was $49,417. Last year (2018) it increased to What are causes of change in equity? Check all that apply. Select: 3 Issue and retirement of stoclk Depreciation of -$41,287 Change in inventory of-$1,079. An accounts payable change of$2,078. Dividend payment ofs7,236. Plant Improvements of $9,580 A change in short term debt of-$3,761. A change in cash of-$1,731 A bond issue of$1,211 A change of plant and equipment ofS9,580 Profits of $12,587Explanation / Answer
Total equity can increase on the balance sheet whenever a company issues shares or there is an increase in company retained earnings.
Therefore the 3 changes that impact change in equity are :
Profit of $ 12587
Dividend payment of 7236
Issue and retirement of stock.
Retained earnings are the earnings that are available to the equity share holders after the payment of dividends out of the profits available for the company.
Therefore, we can conclude that issue and retirement of stock and retained earnings are reasons for the change in equity i.e., increase in equity.
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