Question

The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances: Credits Debits 30,200 15,500 26,000 Account Title Cash Accounts receivable Equipment Accumulated depreciation Salaries payable Common stock Retained earnings Tota 7,800 8,750 46,500 8,650 71,700 71,700 The following is a summary of the transactions for the year: a. Service revenue, $124,000, of which $37,200 was on account and the balance was received in cash. b. Collected on accounts receivable, $25,300. c.Issued shares of common stock in exchange for $13,500 in cash. d. Pald salaries. $45,250 (of which $8,750 was for salaries payable at the end of the prior year). e. Paid miscellaneous expense for various items, $24,400. f. Purchased equipment for $16,000 in cash. g. Paid $3,000 in cash dividends to shareholders. 1. Accrued salaries at year-end amounted to $905. 2. Depreciation for the year on the equipment is $2,600.

Answer 1

Req. 2, 5 & 8:

Transaction / Date	General Journal	Debit	Credit
		$	$
a.	Cash	86,800
	Accounts Receivable	37,200
	Service Revenue		124,000
b.	Cash	25,300
	Accounts Receivable		25,300
c.	Cash	13,500
	Common Stock		13,500
d.	Salaries Expense	36,500
	Salaries Payable	8,750
	Cash		45,250
e.	Miscellaneous Expense	24,400
	Cash		24,400
f.	Equipment	16,000
	Cash		16,000
g.	Dividends	3,000
	Cash		3,000
Ajusting Entries
1.	Salaries Expense	905
	Salaries Payable		905
2.	Depreciation Expense	2,600
	Accumulated Depreciation		2,600
Closing Entries
Dec 31, 2021	Service Revenue	124,000
	Retained Earnings		124,000
	To close revenue account
Dec 31, 2021	Retained Earnings	64,405
	Salaries Expense		37,405
	Depreciation Expense		2,600
	Miscellaneous Expenses		24,400
	To close expense accounts
Dec 31, 2021	Retained Earnings	3,000
	Dividends		3,000
	To close dividends account

4.

Karlin Company Unadjusted Trial Balance December 31, 2021
Account Title	Debit	Credit
	$	$
Cash	67,150
Accounts Receivable	27,400
Equipment	42,000
Accumulated Depreciation		7,800
Salaries Payable		0
Common Stock		60,000
Retained Earnings		8,650
Dividends	3,000
Service Revenue		124,000
Salaries Expense	36,500
Miscellaneous Expense	24,400
Depreciation Expense	0
Totals	$ 200,450	$ 200,450

6.

Karlin Company Adjusted Trial Balance December 31, 2021
Account Titles	Debit	Credit
	$	$
Cash	67,150
Accounts Receivable	27,400
Equipment	42,000
Accumulated Depreciation		10,400
Salaries Payable		905
Common Stock		60,000
Retained Earnings		8,650
Dividends	3,000
Service Revenue		124,000
Salaries Expense	37,405
Miscellaneous Expense	24,400
Depreciation Expense	2,600
Totals	$ 203,955	$ 203,955

7-a.

Karlin Company Income Statement For the year ended December 31, 2021
Revenues
Service Revenue		$ 124,000
Expenses
Salaries Expense	$ 37,405
Depreciation Expense	2,600
Miscellaneous Expense	24,400
Total Expenses		64,405
Net Income		$ 59,595