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 account balances:
Account Title | Debits | Credits | ||
Cash | 28,100 | |||
Accounts receivable | 19,000 | |||
Equipment | 33,000 | |||
Accumulated depreciation | 9,900 | |||
Salaries payable | 10,500 | |||
Common stock | 50,000 | |||
Retained earnings | 9,700 | |||
Total | 80,100 | 80,100 | ||
The following is a summary of the transactions for the year:
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.
I have everything correct except number 9. Would someone be able to tell me what's wrong here? It says everything is correct EXCEPT for the revenue and expense accounts
Journal entries
Account | debit | credit |
Account Recievable | 41,400 | |
Cash | 96,600 | |
Service Revenue | 138,000 | |
Cash | 27,400 | |
Account Recievable | 27,400 | |
Cash | 17,000 | |
Common stock | 17,000 | |
Salaries payable | 10,500 | |
Salaries expenses | 40,000 | |
Cash | 50,500 | |
Misc expenses | 27,200 | |
Cash | 27,200 | |
Equipment | 19,500 | |
Cash | 19,500 | |
Dividends | 3,350 | |
Cash | 3,350 |
T accounts
Cash
Bal | 28,100 | 4. | 50,500 |
1. | 96,600 | 5. | 27,200 |
2. | 27,400 | 6 | 19,500 |
3. | 17,000 | 7 | 3,350 |
Bal | 68,550 |
Account Recievable
Bal | 19,000 | 2. | 27,400 |
1. | 41,400 | ||
Bal | 33,000 | ||
Equipment
Bal | 33,000 | ||
6 | 19,500 | ||
Bal | 52,500 |
Salaries payable
4 | 10,500 | Bal | 10,500 |
Common stock
Bal | 50,000 | ||
3 | 17000 | ||
Bal | 67,000 |
Salaries expenses
4 | 40,000 |
Misc expenses
5 | 27,200 |
Dividends
7 | 3350 |
Unadjusted trail balance
Accounts | debit | credit |
Cash | 68,550 | |
Account Recievable | 33,000 | |
Equipment | 52,500 | |
Common stock | 67,000 | |
Retained earnings | 9,700 | |
Accumulated depreciation | 9,900 | |
Salaries expenses | 40,000 | |
Misc expenses | 27,200 | |
Dividends | 3,350 | |
Service Revenue | 138,000 | |
Total | 224,600 | 224,600 |
Adjusting entries
1. | Salaries expenses | 1,010 | |
Salaries payable | 1,010 | ||
2. | Depreciation expense | 3,300 | |
Accumulated depreciation | 3,300 | ||
T account
Salaries expenses
Bal | 40,000 | ||
1. | 1,010 | ||
Bal | 41,010 |
Salaries payable
1 | 1,010 |
Depreciation expense
2 | 3,300 | ||
Accumulated depreciation
Bal | 9,900 | ||
2 | 3,300 | ||
Bal | 13,200 |
Adjusted Trail balance
Accounts | debit | credit |
Cash | 68,550 | |
Account Recievable | 33,000 | |
Equipment | 52,500 | |
Common stock | 67,000 | |
Retained earnings | 9,700 | |
Accumulated depreciation | 13,200 | |
Salaries payable | 1,010 | |
Salaries expenses | 41,010 | |
Misc expenses | 27,200 | |
Depreciation expense | 3,300 | |
Dividends | 3,350 | |
Service Revenue | 138,000 | |
Total | 228,910 | 228,910 |
Income statement
Service revenue | 138,000 | |
Expenses | ||
Salaries expenses | 41,010 | |
Misc expenses | 27,200 | |
Depreciation expense | 3,300 | |
Total expenses | 71,510 | |
Net income | 66,490 | |
Retained earnings statement
Openings balance | 9,700 |
Income | 66,490 |
Dividends | (3350) |
Closing balance | 72,840 |
Balance sheet
Assets | Equity and liabilities | |||
Cash | 68,550 | salaries payable | 1,010 | |
Account Recievable | 33,000 | stockholders equity | ||
Equipment | 52,500 | Common stock | 67,000 | |
Less: Accumulated depreciation | 13,200 | 39,300 | retained earnings | 72,840 |
Total | 140,850 | 140,850 |
Closing journal entries
Service Revenue | 138,000 | |
Income Summary | 138,000 | |
Income Summary | 71,510 | |
Salaries expenses | 41,010 | |
Misc expenses | 27,200 | |
Depreciation expense | 3,300 | |
Income Summary | 66,490 | |
Retained earnings | 66,490 | |
Retained earnings | 3350 | |
Dividends | 3350 |
Post closing trail balance
Accounts | debit | credit |
Cash | 68,550 | |
Account Recievable | 33,000 | |
Equipment | 52,500 | |
Accumulated depreciation | 13,200 | |
Salaries payable | 1,010 | |
Common stock | 67,000 | |
Retained earnings | 72,840 | |
Total | 154,050 | 154,050 |
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