Answer:
Common Stocks 15,400
Explanation:
cash 8,800 Account Payable 2,500
account receivable 3,000 Common Stock x (B)
Total Current Assets 11,800 Reained Earnings 9,900 (A)
Land 16,000
Total Assets 27,800 Liability + SE 27,800
<u>(A) First we calculate the RE:</u>
beginning RE + net income
net income = revenue - expense
19,000 - 14,500 = 4,500
beginning RE + net income
5,400 + 4,500 = 9,900
<u>(B) We solve for Equity using the accounting equation</u>
Liab + Equity = Assets
2,500 + (Comon Stock + Retained Earnings) = 27,800
Common stock + 9,900 = 27,800 - 2,500
Common stock = 27,800 - 2,500 - 9,900 = 15,400
