Baldwin Products Company anticipates reaching a sales level of $6 million in one year. The company expects earnings after taxes during the next year to equal

$400,000. During the past several years, the company has been paying $50,000 in dividends to its stockholders. The company expects to continue this policy for at least the next year. The actual balance sheet and income statement for Baldwin during 2010 follow. P715

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Baldwin Products Company Balance Sheet as of December 31, 2010 Cash $ 200,000 Accounts payable $ 600,000 Accounts receivable 400,000 Notes payable 500,000 Inventories 1,200,000 Long-term debt 200,000 Fixed assets, net 500,000 Stockholders' equity 1,000,000 Total assets $2,300,000 Total liabilities and equity $2,300,000 Income Statement for the Year Ending December 31, 2010 Sales Expenses, including interest and taxes Earnings after taxes $4,000,000 $3,700,000 $ 300,000