The following account balances were drawn from the 2011 fina

The following account balances were drawn from the 2011 financial statements of Gwynn Company Cash $2,400Supplies A/R Land 1800 Common Stock 1,300 Retained earnings Revenues Expenses $605 3,290 6,300 3,280 Based on the above information, what is the balance of Common Stock for Gwynn Company?

Solution

We know ,

Equity or Common Stock + Retained Earnings = Assets - Liabilities

Information given :

Assets = $2,400 + $1,800 + $1,300 + $605 = $6,105

Liabilities = $0

Retained Earnings = $3,290 (Note : Since the Retained earnings ending balance for the year is given , thus the impact the revenue & expense is aready adjusted in retained earnings balance)

Therefore , Common Stock = $6,105 - $3,290 = $2,815