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.