Help for this question

[Brendan1234]

Hi I can’t seem to balance the sheet for this question.. am I doing something wrong?

 

[kirby]

OK, you attempted the question and that's all the Forum asks you to do before any Forum member can guide you. Great.

Notice you are out of balance by $50,000. So you now need to revisit any posting you made for $50,000 or half that amount. The reason you look for half the amount is in case you posted something as a debit when it should have been a credit - or vice versa.

That should get you to your error. If still stuck let us know.

 

[Brendan1234]

Hi, here is my working to get the above details. Still can’t seem to find where the 50,000 is. I’m sorry for the beginner’s format in writing for my accounting questions. I’m very new to accounting and started just a week ago. Please pardon me!

 

[kirby]

What is half of the $50,000 difference? Only one transaction meets that criteria.

 

[Brendan1234]

Hi sir, may I just ask why is it that when you sell capital stock you credit it instead of debitting it? Because from my understanding it’s that the owner sold away the stock so shouldn’t the capital stock go down since we’re accounting for it? Thank you for your patience

 

[kirby]

The homework question was poorly written as it is confusing. The correct language would have been " The company issued additional stock for $25,000". So then your entry is Dr Cash $25,000 and credit Stock $25,000.

Using their format the sentence "The car was sold for $25,000" would logically mean a car was sold and you no longer have a car. This is why you thought you no longer had $25,000 of stock.

 

[Brendan1234]

Thank you sir. Sorry for the late reply I was busy working. Thanks for the clarification much appreciated for your help!