The following are the current month's balances for ABC Financial Services, Inc. before preparing the trial balance. $$\begin{array} { | l | r | }
\hline \text { Accounts Payable } & \$ 5,000 \
\hline \text { Revenue } & 3,000 \
\hline \text { Cash } & 2,000 \
\hline \text { Expenses } & 15,500 \
\hline \text { Furniture } & 13,000 \
\hline \text { Accounts Receivable } & 12,000 \
\hline \text { Common Stock } & ? \
\hline \text { Notes Payable } & 8,500\
\hline
\end{array}$$ What amount should be shown for Common Stock on the trial balance?

Question

The following are the current month's balances for ABC Financial Services, Inc. before preparing the trial balance. $$\begin{array} { | l | r | } 
\hline \text { Accounts Payable } & \$ 5,000 \
\hline \text { Revenue } & 3,000 \
\hline \text { Cash } & 2,000 \
\hline \text { Expenses } & 15,500 \
\hline \text { Furniture } & 13,000 \
\hline \text { Accounts Receivable } & 12,000 \
\hline \text { Common Stock } & ? \
\hline \text { Notes Payable } & 8,500\
\hline
\end{array}$$ What amount should be shown for Common Stock on the trial balance?

Quizplus · Accepted Answer

The total assets are $32,000 (Cash $2,000 + Accounts Receivable $12,000 + Furniture $13,000 + Expenses $15,500). The total liabilities are $22,000 (Accounts Payable $5,000 + Notes Payable $8,500 + Revenue $3,000). The difference between the total assets and the total liabilities is the owner's equity, which is $10,000. The common stock is the only owner's equity account, so it must have a balance of $10,000.

The Following Are the Current Month's Balances for ABC Financial