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

Recognize and describe the purposes and processes of closing entries in accounting.

Calculate ending capital based on given financial information.

Identify the steps in the process of closing income statement accounts.

Understand the effects of omitting or incorrectly recording closing entries.

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