The following are the current month's balances for Toys Galore, Inc. before preparing the trial balance. Accounts Payable $ 5,000 Revenue 5,000 Cash 5,000 Expenses 17,500 Furniture 10,000 Accounts Receivable 12,000 Common Stock ? Notes Payable 5,500. What amount should be shown for Common Stock on the trial? balance?

Question

Business

Damien Melton

16 January, 17:58

The following are the current month's balances for Toys Galore, Inc. before preparing the trial balance. Accounts Payable $ 5,000 Revenue 5,000 Cash 5,000 Expenses 17,500 Furniture 10,000 Accounts Receivable 12,000 Common Stock ? Notes Payable 5,500. What amount should be shown for Common Stock on the trial? balance?

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London · Answer 1

common stock = 29,000 credit

Explanation:

We will calculate the debits and credit and solve for common stocks:

Assets and expenses (debits)

cash 5,000

accounts receivable 12,000

furniture 10,000

expenses 17, 500

Total 44,500

Now the credits which is liabilities, equity and revenues:

account payable 5,000

note payable 5,500

revenues 5,000

total 15,500

To balance common stock must made up the difference between debit and credit:

44,500 - 15,500 = 29,000

Notes: from the expand accounting equation we can conclude which has debit and credit balance:

assets + expenses = laiblities + equity + revenues

this side is debit while this is credit