Nelson Company began operations on December 1, Year 1. The following transactions and adjustments were recorded in December and posted to the company's ledger accounts:
1) Acquired $9,000 cash from the issue of common stock to its stockholders.
2) Provided services on account for $7,500.
3) Paid $4,500 cash for land.
4) Owed $3,000 of salaries expenses to employees for work done in December that will be paid during January.
5) Purchased $900 of supplies on account to be used in January.
6) Collected $3,900 from customers.

What is the total of the debit account balances that will be reported on the company's adjusted trial balance at December 31,Year 1?
A)$12,000
B)$20,400
C)$6,900
D)$28,800

Question

Nelson Company began operations on December 1, Year 1. The following transactions and adjustments were recorded in December and posted to the company's ledger accounts:  
1) Acquired $9,000 cash from the issue of common stock to its stockholders. 
2) Provided services on account for $7,500. 
3) Paid $4,500 cash for land. 
4) Owed $3,000 of salaries expenses to employees for work done in December that will be paid during January. 
5) Purchased $900 of supplies on account to be used in January. 
6) Collected $3,900 from customers.

What is the total of the debit account balances that will be reported on the company's adjusted trial balance at December 31,Year 1?
A)$12,000
B)$20,400
C)$6,900
D)$28,800

Quizplus · Accepted Answer

Ending Cash balance = $9,000 - $4,500 + $3,900 = $8,400
Ending accounts receivable balance = $7,500 - $3,900 = $3,600
Debit balances = Cash of $8,400 + Accounts receivable of $3,600 + Land of $4,500 + Salaries expenses of $3,000 + Supplies of $900 = $20,400
To check:
Credit balances = Accounts payable of $900 + Salaries payable of $3,000 + Revenue of $7,500 + Common stock of $9,000 = $20,400

Nelson Company Began Operations on December 1, Year 1