BPP Kit Q. No. 16.13

Steve’s furniture business has cash of $3,575,trade receivables of $2,750, inventory worth $21,870 and a bank loan of $5,600. He rents his showroom from the owner of the premises for $12,000 a quarter, paid in advance on the 1 of February, May, August and November each year.

What is the capital balance at 31 December 20X1?
A $34,595
B $25,595
C $22,595
D $28,195

Answer in the book: B $25,595

Doubt: I think the answer should be $26,595.
I am not convinced with the answer in the book.

Sir, please explain this.