The year-end adjustment to recognize one month's work on the three-month contract results in a $2,000 decrease in liabilities (unearned revenue)and an increase in equity (retained earnings due to recognizing revenue).
The following account balances were drawn from the 2016 financial statements of Grayson Company:

-Based on the above information,what is the balance of Common Stock for Grayson Company?
A)$15,400
B)$19,900
C)$900
D)$20,800

Question

The year-end adjustment to recognize one month's work on the three-month contract results in a $2,000 decrease in liabilities (unearned revenue)and an increase in equity (retained earnings due to recognizing revenue).
The following account balances were drawn from the 2016 financial statements of Grayson Company:
 
-Based on the above information,what is the balance of Common Stock for Grayson Company?
A)$15,400 
B)$19,900 
C)$900 
D)$20,800

Quizplus · Accepted Answer

Common Stock = $15,000 + $400 = $15,400

The Year-End Adjustment to Recognize One Month's Work on the Three-Month