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

question 46

Multiple Choice

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

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Definitions:

Monthly Net Operating Income

Net operating income calculated on a monthly basis, indicating the profitability of business operations within that month.

Fixed Expenses

Costs that do not change with the level of production or sales, such as rent and salaries, remaining constant over a period.

Monthly Advertising Budget

A planned amount of money dedicated to promoting a company's products or services for a month.

Sales Commissions

Payments made to sales staff based on the value or volume of sales generated.