Question

The general ledger of the Karlin Company, a consulting company, at January 1, 2018, contained the following account balances Account Title Cash Accounts receivable Equipment Accumulated depreciation Salaries payable Common stock Retained earnings Total Debits Credits 31,700 13,000 21,000 6,300 7,500 44,000 7,900 65,700 65,700 The following is a summary of the transactions for the year: a. Sales of services, $114,000, of which $34,200 was on credit. b. Collected on accounts receivable, $23,800 c. Issued shares of common stock in exchange for $11,000 in cash d. Paid salaries, $41,500 (of which $7,500 was for salaries payable) e. Paid miscellaneous expenses, $22,400 f. Purchased equipment for $13,000 in cash g. Paid $2,750 in cash dividends to shareholders 1. Accrued salaries at year-end amounted to $830 2. Depreciation for the year on the equipment is $2,100

Answer 1

Cash Account

Transaction	Accounts title	Amount	Transaction	Accounts title	Amount
	To Balance b/d	31700
a	To service revenue	79800	d	By salaries expense	34000
			d	By salaries payable	7500
b	To Accounts receivable	23800	e	By Miscellaneous expense	22400
c	To common stock	11000	f	By equipment	13000
			g	By Dividend	2750
				By Balance c/d (B/F)	66650

Accounts receivable Account

Transaction	Accounts title	Amount	Transaction	Accounts title	Amount
	To Balance b/d	13000	b	By cash	23800
a	To service revenue	34200		By Balance c/d (B/F)	23400

Equipment Account

Transaction	Accounts title	Amount	Transaction	Accounts title	Amount
	To Balance b/d	21000
f	To cash	13000		By Balance c/d (B/F)	34000

Accumulated Depreciation Account

Transaction	Accounts title	Amount	Transaction	Accounts title	Amount
	To Balance c/d (B/F)	8400		By Balance b/d	6300
			2	By Depreciation expense	2100

Salary Payable Account

Transaction	Accounts title	Amount	Transaction	Accounts title	Amount
d	To cash	7500		By Balance b/d	7500
	To Balance c/d (B/F)	830	1	By salaries expense	830

Common stock Account

Transaction	Accounts title	Amount	Transaction	Accounts title	Amount
				By Balance b/d	44000
	To Balance c/d (B/F)	55000	c	By cash	11000

Income statement Account

Transaction	Accounts title	Amount	Transaction	Accounts title	Amount
d	To salaries expense	34000	a	By service revenue	114000
e	To Miscellaneous expense	22400
1	To salaries expense	830
2	To Depreciation expense	2100
	To Retained earnings(B/F)	54670

Retained Earning Account

Transaction	Accounts title	Amount	Transaction	Accounts title	Amount
g	To Dividend	2750		By Balance b/d	7900
	To Balance c/d (B/F)	59820		By income statement	54670