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Homework answers / question archive / Swifty Corporation showed the following balances at the end of its first year: Cash = $8,360 Prepaid insurance = 380 Accounts receivable = $1,900 Accounts payable = $1,520 Notes payable = $2,280 Common stock = $3,800 Dividends = 380 Revenues = 16,720 Expenses = 9,500 What amount did Swifty Corporation show as total credits? a
Swifty Corporation showed the following balances at the end of its first year:
Cash = $8,360
Prepaid insurance = 380
Accounts receivable = $1,900
Accounts payable = $1,520
Notes payable = $2,280
Common stock = $3,800
Dividends = 380
Revenues = 16,720
Expenses = 9,500
What amount did Swifty Corporation show as total credits?
a. $24,320
b. $25,080
c. $24,700
d. $23,940
Answer: a. $24,320
| Cash = $8,360 | Cash is an asset account and the normal balance is debit |
| Prepaid insurance = 380 | Prepaid insurance is an asset account and the normal balance is debit |
| Accounts receivable = $1,900 | Account receivable is an asset account and the normal balance is debit |
| Accounts payable = $1,520 | Account payable is a liability account and the normal balance is credit |
| Notes payable = $2,280 | Notes payable is a liability account and the normal balance is credit |
| Common stock = $3,800 | Common stock is an equity account and the normal balance is credit |
| Dividends = 380 | Dividends are deduction to equity accounts which is why it is debited |
| Revenues = 16,720 | Revenue accounts should be credited |
| Expenses = 9,500 | Expense accounts should be debited |
Based on the explanation above, total credits is computed as follows:
| Account | Amount |
|---|---|
| Accounts payable | $1,520 |
| Notes payable | 2,280 |
| Common stock | 3,800 |
| Revenues | 16,720 |
| Total | $24,320 |
