An adjusted trial balance is given below.
$$\begin{array} { | l | l | l | }
\hline & \text { Debit } & \text { Credit } \
\hline \text { Cash } & \$ 13,000 & \
\hline \text { Accounts receivable } & 4000 & \
\hline \text { Prepaid rent } & 300 & \
\hline \text { Inventory } & 26,000 & \
\hline \text { Accounts payable } & & \$ 4000 \
\hline \text { Salaries payable } & & 500 \
\hline \text { Loan payable } & & 500 \
\hline \text { Smith, capital } & & 12,700 \
\hline \text { Drawings } & 2000 & \
\hline \text { Sales revenue } & &92,800 \
\hline \text { Sales returns and } & & \
\hline \text { llowances } & 1300 & \
\hline \text { Sales discounts } & 500 & \
\hline \text { Cost of sales } & 21,000 & \
\hline \text { Salaries expense } & 21,000 & \
\hline \text { Rent expense } & 12,000 & \
\hline \text { Selling expense } & 8200 & \
\hline \text { Supplies expense } & 800 & \
\hline \text { Total } & \$ 110,600 & \$ 110,600 \
\hline
\end{array}$$
What will be the final balance in the Smith,capital account after recording the closing entries?
A) $38,700
B) $26,000
C) $1700
D) $40,700

Question

An adjusted trial balance is given below.
$$\begin{array} { | l | l | l | } 
\hline & \text { Debit } & \text { Credit } \
\hline \text { Cash } & \$ 13,000 & \
\hline \text { Accounts receivable } & 4000 & \
\hline \text { Prepaid rent } & 300 & \
\hline \text { Inventory } & 26,000 & \
\hline \text { Accounts payable } & & \$ 4000 \
\hline \text { Salaries payable } & & 500 \
\hline \text { Loan payable } & & 500 \
\hline \text { Smith, capital } & & 12,700 \
\hline \text { Drawings } & 2000 & \
\hline \text { Sales revenue } & &92,800 \
\hline \text { Sales returns and } & & \
\hline \text { llowances } & 1300 & \
\hline \text { Sales discounts } & 500 & \
\hline \text { Cost of sales } & 21,000 & \
\hline \text { Salaries expense } & 21,000 & \
\hline \text { Rent expense } & 12,000 & \
\hline \text { Selling expense } & 8200 & \
\hline \text { Supplies expense } & 800 & \
\hline \text { Total } & \$ 110,600 & \$ 110,600 \
\hline
\end{array}$$
What will be the final balance in the Smith,capital account after recording the closing entries?
A) $38,700
B) $26,000
C) $1700
D) $40,700

Quizplus · Accepted Answer

The closing entries will transfer the balances of the revenue and expense accounts to the Smith, capital account. The total revenue is $92,800, and the total expenses are $63,500. Therefore, the net income is $29,300. The closing entry to transfer the net income to the Smith, capital account is:Debit: Sales revenue $92,800Credit: Smith, capital $29,300After recording this closing entry, the balance in the Smith, capital account will be $38,700.

An Adjusted Trial Balance Is Given Below What Will Be the Final Balance in the Smith,capital Account