Q3TI. - Horngren'S Financial And Managerial Accounting

Question

Using the expanded accounting equation, solve for the missing amount. Assets $ 71,288 Liabilities 2,260 Common Stock ? Dividends 14,420 Revenues 53,085 Expenses 28,675

Step-by-Step Solution

Answer

The common stock is $59,038.

Expanded accounting equation

 The expanded accounting equation is shown as follows:

Calculation of common stock

Contributed capital (Common stock) is caclualted as follows: 

Common Stock = Total Liabilities & Equity - Liabilities - Retained Earnings

                           = $71,288 - $2,260 - ( - $14,420 + $53,085 - $28,675)

                           = $59,038

Thus, common stock equals $59,038.