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30 May, 17:36

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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  1. 30 May, 18:02
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    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
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