Flores Realty Corporation had the following balance sheet accounts and balances: $$\begin{array} { l c l r }
\text { Accounts Payable } & \$ 6,000 & \text { Common Stock } & ? \
\text { Accounts Receivable } & 1,000 & \text { Equipment } & \$ 7,000 \
\text { Building } & ? & \text { Land } & 7,000 \
\text { Cash } & 3,000 & \text { Retained Earnings } & 2,000
\end{array}$$ If the balance of the Building account were $14,000 and $3,000 of Accounts Payable were paid in cash,what would be the balance of the Common Stock account?

Question

Flores Realty Corporation had the following balance sheet accounts and balances: $$\begin{array} { l c l r } 
\text { Accounts Payable } & \$ 6,000 & \text { Common Stock } & ? \
\text { Accounts Receivable } & 1,000 & \text { Equipment } & \$ 7,000 \
\text { Building } & ? & \text { Land } & 7,000 \
\text { Cash } & 3,000 & \text { Retained Earnings } & 2,000
\end{array}$$ If the balance of the Building account were $14,000 and $3,000 of Accounts Payable were paid in cash,what would be the balance of the Common Stock account?

Quizplus · Accepted Answer

The correct answer is A.The balance of the Common Stock account would be $24,000. This is because the total assets of the company are $28,000 (Cash + Accounts Receivable + Building + Land + Equipment). The total liabilities of the company are $6,000 (Accounts Payable). The total equity of the company is $22,000 (Common Stock + Retained Earnings). Therefore, the balance of the Common Stock account would be $24,000 ($22,000 + $3,000 - $14,000).

Flores Realty Corporation Had the Following Balance Sheet Accounts and Balances