Refer to the following adjusted trial balance. There were no new capital contrib
ID: 2526030 • Letter: R
Question
Refer to the following adjusted trial balance.
There were no new capital contributions during the year. What will the balance of the Smith, Capital account be after the closing entries are posted?
.
$34,200
b.
$31,400
c.
$35,200
d.
$32,400
Accounts Debit Credit Cash $1,700 Accounts Receivable 8,600 Office Supplies 400 Equipment 28,100 Accumulated Depreciation — Equipment $2,000 Accounts Payable 1,200 Salaries Payable 950 Unearned Revenue 450 Smith, Capital 3,800 Smith, Withdrawals 1,000 Service Revenue 55,600 Salaries Expense 20,000 Supplies Expense 2,200 Depreciation Expense — Equipment 2,000 Total $64,000 $64,000Explanation / Answer
Ending Capital = Beginning capital + net income – withdrawals
Beginning Capital = $3,800
Withdrawals = $1,000
Net Income = $55,600 – 20,000 – 2,200 - 2,000 = $31,400
Ending Capital = $3,800 + $31,400 - $1,000 = $34,200
Hence, Option A is correct.