The following is the adjusted trial balance for Baker Services. \(\begin{array}{|l|r|r|}
\hline \text { Accounts } & \text { Debit } & \text { Credit }\
\hline \text { Cash } & \$ 31,100 \
\hline \text { Accounts Receivable } & 30,000 \
\hline \text { Prepaid Insurance } & 3,500 \
\hline \text { Office Supplies } & 3,200 \
\hline \text { Land } & 49,000 \
\hline \text { Building } & 150,000\
\hline \text { Accumulated Depreciation-Building } & & \$ 14,500 \
\hline \text { Equipment } & 77,000 & 7,000 \
\hline \text { Accumulated Depreciation-Equipment } & & 25,000 \
\hline \text { Accounts Payable } & & 2,000 \
\hline \text { Salaries Payable } & & 26,000 \
\hline \text { Unearned Revenue } & & 106,00 \
\hline \text { Mortgage Payable } & & 24,500\
\text { Baker, Withdrawals } & 23,000 & \
\hline \text { Service Revenue } & &275,000 \
\hline \text { Salaries Expense } & 64,000 & \
\hline \text { Depreciation Expense-Building and } & & \
\text { Equipment } & 5,600 & \
\hline \text { Supplies Expense } &11,000 & \
\hline \text { Insurance Expense } & 14,600 & \
\hline \text { Utilities Expense } &18,000 \
\hline \text { Total } & \$ 480,000 & \$ 480,000\
\hline
\end{array}\)
There were no new capital contributions during the year.After the closing entries are posted,what is the balance in Baker,Capital?
A) $1,500
B) $209,300
C) $24,500
D) $163,300

Question

The following is the adjusted trial balance for Baker Services. \(\begin{array}{|l|r|r|}
\hline \text { Accounts } & \text { Debit } & \text { Credit }\
\hline \text { Cash } & \$ 31,100 \
\hline \text { Accounts Receivable } & 30,000 \
\hline \text { Prepaid Insurance } & 3,500 \
\hline \text { Office Supplies } & 3,200 \
\hline \text { Land } & 49,000 \
\hline \text { Building } & 150,000\
\hline \text { Accumulated Depreciation-Building } & & \$ 14,500 \
\hline \text { Equipment } & 77,000 & 7,000 \
\hline \text { Accumulated Depreciation-Equipment } & & 25,000 \
\hline \text { Accounts Payable } & & 2,000 \
\hline \text { Salaries Payable } & & 26,000 \
\hline \text { Unearned Revenue } & & 106,00 \
\hline \text { Mortgage Payable } & & 24,500\
\text { Baker, Withdrawals } & 23,000 &  \
\hline \text { Service Revenue } & &275,000 \
\hline \text { Salaries Expense } & 64,000 & \
\hline \text { Depreciation Expense-Building and } & & \
\text { Equipment } & 5,600  & \
\hline \text { Supplies Expense } &11,000 & \
\hline \text { Insurance Expense } &  14,600 & \
\hline \text { Utilities Expense } &18,000 \
\hline \text { Total } &  \$ 480,000 & \$ 480,000\
\hline 
\end{array}\)
 There were no new capital contributions during the year.After the closing entries are posted,what is the balance in Baker,Capital?
A) $1,500
B) $209,300
C) $24,500
D) $163,300

Quizplus · Accepted Answer

After the closing entries are posted, the balance in the capital account will be equal to the beginning balance in the capital account plus net income or minus net loss. In this case, the beginning balance in Baker, Capital is given as $150,000. The total debits in the trial balance (excluding the Baker, Capital account) are $558,600, and the total credits are $546,300. Therefore, the net income for the year is $12,300 ($558,600 - $546,300). Adding this to the beginning capital balance of $150,000 gives an ending balance of $162,300. However, there is also a credit balance of $1,000 in the Dividends account that needs to be deducted, resulting in a final balance of $163,300 ($162,300 - $1,000). Therefore, the correct answer is D.

The Following Is the Adjusted Trial Balance for Baker Services