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Chapter 1: Q3TI. (page 13)

Using the expanded accounting equation, solve for the missing amount. Assets $ 71,288 Liabilities 2,260 Common Stock ? Dividends 14,420 Revenues 53,085 Expenses 28,675

Short Answer

Expert verified

The common stock is $59,038.

Step by step solution

01

Expanded accounting equation

The expanded accounting equation is shown as follows:

02

Calculation of common stock

Contributed capital (Common stock) is caclualted as follows:

Common Stock = Total Liabilities & Equity - Liabilities - Retained Earnings

= $71,288 - $2,260 - ( - $14,420 + $53,085 - $28,675)

= $59,038

Thus, common stock equals $59,038.

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Most popular questions from this chapter

Allen Shonton recently opened his own accounting firm on April 1, which he operates as a corporation. The name of the new entity is Allen Shonton, CPA. Shonton experienced the following events during the organizing phase of the new business and its first month of operations in 2018: Apr. 5 Shonton deposited \(75,000 in a new business bank account titled Allen Shonton, CPA. The business issued common stock to Shonton. 6 Paid \)300 cash for letterhead stationery for new office. 7 Purchased office furniture for the office on account, \(9,500. 10 Consulted with tax client and received \)4,000 for services rendered. 11 Paid utilities, \(190. 12 Finished tax hearings on behalf of a client and submitted a bill for accounting services, \)20,000. 18 Paid office rent, \(750. 25 Received amount due from client that was billed on April 12. 27 Paid full amount of accounts payable created on April 7. 30 Cash dividends of \)3,500 were paid to stockholders. Requirements 2. Prepare the following financial statements: c. Balance sheet

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