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 Comon stock Retained earnings Total 44 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. Paid 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. ses 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. Reg 25 and 8 Reg 3 Reg 4 Reg 6 Req 7A Req 78 Req 9 Prepare a post-closing trial balance. KARLIN COMPANY < Prev 1 of 1 !!! Next

Answer 1

Ans.

2, 5 & 8

Event	Account	Debit	Credit
a	Cash	$86,800
	Accounts Receivable	$37,200
	Service Revenue		$124,000
	[services provided ]
b	Cash	$25,300
	Accounts Receivable		$25,300
	[ Cash collected fron debtors ]
c	Cash	$13,500
	Common Stock		13500
	[ Common Stock issued ]
d	Salaries Expense	$36,500
	Salaries Payable	$8,750
	Cash		$45,250
	[Salaries Expense paid ]
e	Miscellaneous Expense	$24,400
	Cash		$24,400
	[Miscellaneous Expense paid ]
f	Equipment	$16,000
	Cash		$16,000
	[ Equipment purchased ]
g	Dividends	$3,000
	Cash		3000
	[ Dividends paid ]

Adjusting Entries

Event	Account	Debit	Credit
1	Salaries Expense	$    905.00
	Salaries Payable		$    905.00
	[Salary accrued]
2	Depreciation Expense	$ 2,600.00
	Accumulated Depreciation		$ 2,600.00
	[To record depreciation]

Closing Entries

Date	Particulars	Debit	Credit
31.12.2021	Income Summary	$   64,405.00
	Salaries Expense		$   37,405.00
	Miscellaneous Expense		$   24,400.00
	Depreciation Expense		$     2,600.00
	[ Being Expenses account closed ]
31.12.2021	Service Revenue	$ 124,000.00
	Income Summary		$ 124,000.00
	[ Being revenue account closed]
31.12.2021	Income Summary	$   59,595.00
	Retained Earnings		$   59,595.00
	[ Being Profits transferred ]
31.12.2021	Retained Earnings	$     3,000.00
	Dividends		$     3,000.00
	[ Being Dividends charged ]

3.

Cash
Beg. Bal.	$       30,200.00
a.	$       86,800.00	$       45,250.00	d.
b.	$       25,300.00	$       24,400.00	e.
c.	$       13,500.00	$       16,000.00	f.
		$          3,000.00	g.
End. Bal.	$       67,150.00

Accounts Receivable
Beg. Bal.	$       15,500.00
a.	$       37,200.00	$       25,300.00	b.
End. Bal.	$       27,400.00

Equipment
Beg. Bal.	$26,000.00
f.	$16,000.00
End. Bal.	$42,000.00

Salaries Payable
Beg. Bal.		$          8,750.00
d.	$          8,750.00	$             905.00	Adj. 1
End. Bal.		$             905.00

Accumulated Depreciation
Beg. Bal.		$          7,800.00
		$          2,600.00	Adj. 2
End. Bal.		$       10,400.00

Common Stock
Beg. Bal.		$       46,500.00
		$       13,500.00	c.
End. Bal.		$       60,000.00

Dividends
g.	$          3,000.00
		$          3,000.00	CE4
End. Bal.	$                       -

Retained Earnings
Beg. Bal.		$          8,650.00
CE4	$          3,000.00	$       59,595.00	CE3
End. Bal.		$       65,245.00

Service Revenue
Beg. Bal.		$                       -
CE1	$     124,000.00	$     124,000.00	a.
End. Bal.		$                       -

Depreciation Expense
Beg. Bal.	$                       -
Adj.2	$          2,600.00	$          2,600.00	CE1
End. Bal.	$                       -

Miscellaneous Expense
Beg. Bal.	$                       -
e.	$       24,400.00	$       24,400.00	CE1
End. Bal.	$                       -

Salaries Expense
Beg. Bal.	$                       -
d.	$       36,500.00	$       37,405.00	CE1
Adj. 1	$             905.00
End. Bal.	$                       -

Income Summary
Beg. Bal.	$                       -
CE2	$       64,405.00	$     124,000.00	CE2
CE3	$       59,595.00
End. Bal.		$                -

4 , 6 & 9

Particulars	Balance		Year Transaction	Unadjusted		Adjustment	Adjusted		Post Closing
Accounts	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$ 30,200.00		$   36,950.00		$   67,150.00				$   67,150.00		$    67,150.00
Accounts Receivable	$ 15,500.00		$   11,900.00		$   27,400.00				$   27,400.00		$    27,400.00
Equipment	$ 26,000.00		$   16,000.00		$   42,000.00				$   42,000.00		$    42,000.00
Accumulated Depreciation		$   7,800.00		$                -		$     7,800.00		$ 2,600.00		$   10,400.00		$   10,400.00
Salaries Payable		$   8,750.00	$     8,750.00			$                -		$    905.00		$        905.00		$        905.00
Common Stock		$ 46,500.00		$   13,500.00		$   60,000.00				$   60,000.00		$   60,000.00
Retained earning		$   8,650.00				$     8,650.00				$     8,650.00		$   65,245.00
Dividend			$     3,000.00		$     3,000.00				$     3,000.00
Service Revenue				$ 124,000.00		$ 124,000.00				$ 124,000.00
Salaries Expense			$   36,500.00		$   36,500.00		$    905.00		$   37,405.00
Miscellaneous Expense			$   24,400.00		$   24,400.00				$   24,400.00
Depreciation Expense							$ 2,600.00		$     2,600.00
Total	$ 71,700.00	$ 71,700.00	$ 137,500.00	$ 137,500.00	$ 200,450.00	$ 200,450.00	$ 3,505.00	$ 3,505.00	$ 203,955.00	$ 203,955.00	$ 136,550.00	$ 136,550.00

7-a)

Statement of Income
For the period ending 31.12.2021
Service Revenue		$ 124,000.00
Less:
Salaries Expense	$   37,405.00
Miscellaneous Expense	$   24,400.00
Depreciation Expense	$     2,600.00	$   64,405.00
Net Income		$   59,595.00

Statement of Retained Earnings
For the period ending 31.12.2021
Beginning	$          8,650.00
Add: Net Income	$       59,595.00
	$       68,245.00
Less : Dividends	$       (3,000.00)
	$       65,245.00

7-b)

Balance Sheet
As at 31.12.2021
Assets	Amount	Amount	Liabilities	Amount	Amount
Current Assets			Current Liabilities
Cash	$   67,150.00		Salaries Payable		$        905.00
Account Receivable	$   27,400.00	$   94,550.00
Non Current Assets			Shareholders' Equity
Equipment	$   42,000.00		Common Stock	$ 60,000.00
Accumulated Depreciation - Equipment	$ (10,400.00)	$   31,600.00	Retained Earnings	$ 65,245.00	$ 125,245.00
Total Assets		$ 126,150.00	Total Liabilities & Equity		$ 126,150.00