12. Mr. Wa Is started a service business on October 1,2020 with an initial investment of P400,000. During 2020, he provided P800,000 worth of services to customers of which P200,000 were collected...

12. Mr. Wa Is started a service business on October 1,2020 with an initial
investment of P400,000. During 2020, he provided P800,000 worth of
services to customers of which P200,000 were collected during January
2021. Expenses incurred amounted to P400,000 including P100,000
which were paid during January 2021. Mr. Wa Is withdrew P60,000 during
2020.How much should be the capital balance of Mr. Wa Is on December
31,2020 under the cash basis of accounting?

A. P640,000
B. P740,000
C. P800,000
D. P840,000
E. answer not given