Baxter company balance sheet august 31, 2017 assets current assets: $23,600 accounts receivable 5,450 supplies 950 total current 30,000 equipment 11,000 total assets $41,000 (cash acc. rec. sup. equip.) liabilities and stockholders’ equity current liabilities accounts payable $9,000 stockholders’ equity common 30,000 retained 2,000 32,000 total liabilities and stockholders’ equity $41,000 (acct. pay. com. stock. ret. earn.) what percent of assets were financed by creditors and investors respectively in baxter company

22% by creditors and 78% by investors

Explanation:

We just have to focus on the total assets, total liabilities and total stockholders' equity amounts.

As we have known, Assets = Liabilities + Stockholders' Equity

That is $41,000 = $9,000 + $32,000

To get the percent financed by creditors just divide the liabilities by the assets. So $9,000 / $41,000 will give us 0.22 or 22% financed by creditors.

Same goes for the percent financed by stockholders, just divide the stockholders' equity by the assets. So $32,000 / $41,000 will give us 0.78 or 78% financed by stockholders.

Take note that the total of the 2 percentages should equal to 100%.

To check 22% + 78% = 100%