Ayala Company showed the following balances at the end of its first year: What did Ayala Company show as total credits on its trial balance?
A) $21,500
B) $21,000
C) $20,500
D) $22,000

Question

Ayala Company showed the following balances at the end of its first year:  What did Ayala Company show as total credits on its trial balance?
A) $21,500 
B) $21,000 
C) $20,500 
D) $22,000

Quizplus · Accepted Answer

To find the total credits, we need to add up all the credit balances. In this case, the credit balances are:

- Accounts Receivable: $7,000
- Prepaid Insurance: $1,500
- Supplies: $2,500
- Common Stock: $10,000

Total credits = $7,000 + $1,500 + $2,500 + $10,000 = $21,000. Therefore, the correct answer is B.

Ayala Company Showed the Following Balances at the End of Its