The controller for Tires and More,Inc.has recorded the following transactions during the month: the company was established by selling 10,000 shares of stock to the public for $20,000 on the 1st of the month;the company recorded $36,000 of revenue for tires and services provided during the month;and expenses of $22,000 were recorded for the month.What is the balance of Stockholders' Equity at the end of the month,and is the balance a debit or a credit?
A)$34,000 debit.
B)$34,000 credit.
C)$20,000 credit.
D)$6,000 debit.

Question

Quizplus · Accepted Answer

At the end of the month, the balance of Stockholders' Equity would be the initial stockholders investment plus earnings for the period minus expenses. Therefore, Stockholders' Equity = $20,000 (Initial stockholders investment) + $36,000 (Revenue) - $22,000 (Expenses) = $34,000 credit.

The Controller for Tires and More,Inc