Question

Multiple Choice Question 141 Tamarisk, Inc.'s trial balance reported the following balances at the end of its first year: Cash Prepaid insurance Accounts receivable Accounts payable Notes payable Common stock Dividends Revenues Expenses $14560 730 3640 2910 4370 5620 730 30160 18200 What amount did Tamarisk, Inc.'s trial balance show as total credits? $43060 $42330 $44520 $43790

Answer 1

- Trial Balance of Tamarisk Inc Debit in $ Credit in $ Cash 14,560 Prepaid insurance 730 Accounts receivable 3,640 Accounts payable 2,910 Notes payable 4,370 Common stock 5,620 Dividends 730 Revenues 30,160 Expenses 18,200 Totals 37,860 43,060

Answer : Option A : $43,060

Explanation : 1)Cash , Prepaid insurance & Accounts receivable are Current assets ,they will have debit balance therefore they are takem on debit side.

2)Accounts Payable , Notes payable are liabilities ,all liabilties will have credit balance therefore they are taken on credit side.

3)Common stock is an Owners Capital , Capital will have credit balance.

4)Revenue is an income it will have credit balance and expenditure will have debit balance as per Nominal account rule.

5)Dividend will be paid out of profits ,it will be appropriated from profits,hence it was taken on debit side.

Note: It was assumed as Dividend was Paid by entity,Otherwise if it was Assumed as dividend as received(Income) total Credits will be $43,790,answer will be option D.