Question

Problem 2-6 (Algo) Accounting cycle [LO2-3, 2-4,2-5, 2-6, 2-7, 2-8] The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following a Credits Debits 30,800 14,500 24, eee Account Title Cash Accounts receivable Equipment Accumulated depreciation Salaries payable Common stock Retained earnings Total 7,200 8,250 45,500 8,352 69.303 69. 309 The following is a summary of the transactions for the year: a. Service revenue, $120,000, of which $36,000 was on account and the balance was received in cash. b. Collected on accounts receivable, $24,700. c. Issued shares of common stock In exchange for $12,500 in cash. d. Pald salarles, $43,750 (of which $8,250 was for salaries payable at the end of the prior year). e. Pald miscellaneous expense for various items, $23,600. f. Purchased equipment for $14,500 in cash. g. Pald $2,900 In cash dividends to shareholders. 1. Accrued salaries at year-end amounted to $875. 2. Depreciation for the year on the equipment is $2,400. Required: 2., 5, & 8. Prepare the summary, adjusting and closing entries for each of the transactions listed. 3. Post the transactions, adjusting and closing entries Into the appropriate t-accounts. 4. Prepare an unadjusted trial balance. 6. Prepare an adjusted trial balance. 7-a. Prepare an Income statement for 2021. 7-b. Prepare a balance sheet as of December 31, 2021. 9. Prepare a post-closing trial balance. Complete this question by entering your answers in the tabs below.

Answer 1

Credit Debit $36.000 $84.000 $ 1,20,000 $ 24,700 $ 24,700 C. $12,500 $ 12,500 $35,500 $ 8,250 $ 43,750 Transaction General Journal Accounts Receivable Cash Service Revenue b. Cash Accounts Receivable Cash Common Stock d. Salaries Expenses Salaries Payable Cash e. Miscellaneous expenses Cash Equipment Cash Dividends Cash Adjusting Entries Salaries Expenses Salaries Payable Depreciation Expenses Accumulated Depreciation $23,600 $ 23,600 $14,500 $ 14,500 $ 2.900 $ 2,900 $ 875 $ 875 $ 2.400 $ 2,400

Cash Salaries Payable Salaries Expenses $35,500 Income Statement $36,375 $ 875 $36,375 $36,375 Cash Miscellaneous expenses $23,600 Income Statement $23,600 $23,600 $ 23,600 Cash Beg. Bal 30,800 Salaries Expenses $ 35,500 Service Revenue $ 84,000 Salaries Payable $ 8,250 Common Stock $ 12,500 Miscellaneous expenses $ 23,600 Equipment $ 38,500 Dividend $ 2.900 End.Bal $ 18,550 $ 1,27,300 $1,27,300 Service Revenue Income Statement $ 1,20,000 Accounts Receivable $ 36,000 Cash $ 84,000 $ 1,20,000 $ 1,20,000 Accounts Receivable Beg. Bal $ 14,500 Cash $ 24,700 Service Revenue $ 36,000 End.Bal $ 25,800 | $ 50,500 $ 50,500 $38,500 Beg. Bal Cash Equipment $24,000 End. Bal $ 14,500 $38,500 $38,500 Cash Dividend $ 2,900 Retained Earnings $ 2,900 $ 2,900 $ 2,900 End.Bal $ 45,500 $ 12,500 $ 12,500 $ 58,000 Accumulated Depreciation Depreciation Expenses $ 2,400 Income Statement $ 2,400 $ 2,400 $ 2,400 Common Stock $ 58,000 Beg. Bal Cash $ 58,000 Salaries Payable $ 8,250 Beg. Bal $ 875 Salaries Expenses $ 9,125 Cash End.Bal $ $ $ 8,250 875 9.125 End.Bal Accumulated Depreciation $ 9,600 Beg.Bal $ 7,200 Depreciation Expel $ 2,400 $ 9,600 $ 9,600 $ 8,350 Dividend End.Bal Retained earnings $ 2,900 Beg. Bal $ 5,450 $ 8,350 $ 8,350

Credit $ 9,600 $ 58,000 Unadjusted Trail balance Accounts Title Debit Credit Accounts Receivable $ 25,800 Accumulated Depreciation $ 7,200 Cash $ 67,250 Common Stock $ 58,000 Retained Earnings Equipment $ 38,500 Miscellaneous expenses $ 23,600 Salaries Expenses $ 35,500 Retained Earnings $ 5,450 Service Revenue $ 1,20,000 $ 1,90,650 $ 1,90,650 Adjusted Trail balance Accounts Title Debit Accounts Receivable $ 25,800 Accumulated Depreciation Cash $ 67,250 Common Stock Depreciation Expenses $ 2,400 Equipment $ 38,500 Miscellaneous expenses $ 23,600 Salaries Expenses $ 36,375 Retained Earnings Salaries Payable Service Revenue $ 1,93,925 $ 5,450 $ 875 $ 1,20,000 $1,93,925

$ 1,20,000 Income Statement Sales Revenue Operating Expenses: Salaries Expenses $ 36,375 Miscellaneous expenses $ 23,600 Depreciation Expenses $ 2,400 Total Operating Expenses Gross profit Balance Statement Assets Current Assets Cash $ 67,250 Accounts Receivable 25800 Total Current Liabilities | $ 93,050 Equipment $ 38,500 Less: Accumulated Depreciation $ -9,600 $ 28,900 Total Assets $1,21,950 Liabilities & Stock holder's Equity Current Liabilities Salaries Payable 875 Stockholder's Equity Common Stock $ 58,000 Retained Earnings $ 63,075 $ 1,21,075 Total Liabilities & Stockholder's Equity $ 1,21,950 Post Closing Trail Balance Accounts Title Debit Credit Cash $ 67,250 Accounts Receivable 25800 Equipment $ 38,500 Accumulated Depreciation $ 9,600 Salaries Payable $ 875 Common Stock $ 58,000 Retained Earnings $ 63,075 $1,31,550 $1,31,550 $ 62,375 S 57,625 Statement of Retained Earnings Beg.Bal of Retained Earnings $ 8,350 Add: Gross profit $ 57,625 Less: Dividend $ -2.900 End.Bal of Retained Earnings $ 63,075