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At December 31, 2017, the accounting records are as follows- Accounts payable $16,000 Accounts receivable $ 40,000 Land $240,000 Cash Capital stock Equipment $120,000 Building $180,000 Notes payable $190,000 Retained earnings $160,000 Referring to the above information, If Cash is $26,000, what is the December 31, 2017 capital stock balance?
At December 31, 2017, the accounting records are as follows-
| Accounts payable | $16,000 |
| Accounts receivable | $ 40,000 |
| Land | $240,000 |
| Cash | |
| Capital stock | |
| Equipment | $120,000 |
| Building | $180,000 |
| Notes payable | $190,000 |
| Retained earnings | $160,000 |
Referring to the above information, If Cash is $26,000, what is the December 31, 2017 capital stock balance?
Expert Solution
The accounting equation of the balance sheet will be required to solve the capital stock balance
The total assets and liabilities amount is calculated below
| Balance as on December 31 , 2017 | |
|---|---|
| Amount | |
| Assets | |
| Accounts receivable | $40,000 |
| Land | $240,000 |
| Cash | $26,000 |
| Equipment | $120,000 |
| Building | $180,000 |
| Total | $606,000 |
| Liabilities | |
| Accounts payable | $16,000 |
| Notes payable | $190,000 |
| Retained earnings | $160,000 |
| Total | $366,000 |
- The total assets is $606,000
- The total liabilities is $366,000
- The following accounting equation will be used to solve the problem
- Total Assets = Total Liabilities + Capital Stock
- Capital Stock = Total Assets - Total Liabilities
- Capital Stock = $606,000 - $366,000
- Capital Stock = $240,000
The capital stock balance as on December 31, 2017 is $240,000
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