At December 31,2014,the accounting records of Whole Foods Corporation contain the following: If Cash is $26,000,what is the December 31,2014 capital stock balance?

Question

At December 31,2014,the accounting records of Whole Foods Corporation contain the following:  If Cash is $26,000,what is the December 31,2014 capital stock balance?

Quizplus · Accepted Answer

The capital stock balance is calculated by subtracting the total liabilities and total assets from the total equity. We are not given the total liabilities and total equity, so we cannot calculate the exact capital stock balance. However, we can use the accounting equation, which states that assets = liabilities + equity. Therefore, total equity = assets - liabilities. Based on the information given, we know that cash is an asset and its balance is $26,000. Therefore, assets must be at least $26,000. Since the answer choices range from $220,000 to $400,000, we can eliminate choices C and D as they are too high. We are left with choices A and B. Without further information, we cannot determine the exact capital stock balance, but $240,000 (choice B) is a reasonable estimate given the information provided.

At December 31,2014,the Accounting Records of Whole Foods Corporation Contain