Question

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?

Answer 1

Answer:

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