The following account balances were drawn from the Year 1 financial statements of Grayson Company:

What is the balance of the Common Stock account?

Question

The following account balances were drawn from the Year 1 financial statements of Grayson Company:

What is the balance of the Common Stock account?

Quizplus · Accepted Answer

Assets = Liabilities + Equity
$8,800 + $3,000 + $16,000 = $2,500 + Equity
Equity = $25,300
Equity = Common stock + Retained earnings
$25,300 = Common Stock + ($5,400 + $19,000 ? $14,500)
$25,300 = Common Stock + $9,900
Common Stock = $15,400

The Following Account Balances Were Drawn from the Year 1