The following account balances were drawn from the financial statements of Grayson Company: $\begin{array}{llll}
\text { Cash } & \$ 8,800 & \text { Accounts payable } & \$ 2,050\
\text { Accounts receivable } & \$ 3,000 & \text { Common stock } &? \
\text { Land } & \$ 16,000 & \text { Retained earnings, } & \$ 5,400\
&& \text {January 1}\
&& \text {Revenue}& \$ 19,000 \
&& \text {Exmenses}&\$14,500
\end{array}$

Based on the above information, what is the balance of Common Stock for Grayson Company?
A) $15,400
B) $19,900
C) $900
D) $20,800

Question

The following account balances were drawn from the financial statements of Grayson Company: $\begin{array}{llll}
\text { Cash } & \$ 8,800 & \text { Accounts payable } & \$ 2,050\
\text { Accounts receivable } & \$ 3,000 & \text { Common stock } &? \
\text { Land } & \$ 16,000 & \text { Retained earnings, } & \$ 5,400\
 && \text {January 1}\
 && \text {Revenue}& \$ 19,000 \
 && \text {Exmenses}&\$14,500
\end{array}$

Based on the above information, what is the balance of Common Stock for Grayson Company?
A) $15,400
B) $19,900
C) $900
D) $20,800

Quizplus · Accepted Answer

The balance of Common Stock for Grayson Company is $15,400. This can be calculated by subtracting the total liabilities and equity from the total assets. Total assets are $27,800 (cash + accounts receivable + land). Total liabilities are $2,050 (accounts payable). Total equity is $5,400 (retained earnings) + $15,400 (common stock). Therefore, common stock is $27,800 - $2,050 - $5,400 = $15,400.

The Following Account Balances Were Drawn from the Financial Statements