Question

The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances:

   

Account Title	Debits		Credits
Cash	33,200
Accounts receivable	10,500
Equipment	16,000
Accumulated depreciation			4,800
Salaries payable			6,250
Common stock			41,500
Retained earnings			7,150
Total	59,700		59,700

The following is a summary of the transactions for the year:

1. Service revenue, $104,000, of which $31,200 was on account and the balance was received in cash.
2. Collected on accounts receivable, $22,300.
3. Issued shares of common stock in exchange for $8,000 in cash.
4. Paid salaries, $37,750 (of which $6,250 was for salaries payable at the end of the prior year).
5. Paid miscellaneous expense for various items, $20,400.
6. Purchased equipment for $10,500 in cash.
7. Paid $2,475 in cash dividends to shareholders.

1. Accrued salaries at year-end amounted to $755.
2. Depreciation for the year on the equipment is $1,600.

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.

Answer 1

a Cash Accounts reievable Service revenue $ 72,800 $ 31,200 $ 104,000 b Cash $ 22,300 Account recievable $ 22,300 C Cash $ 8,000 Common Stock $ 8,000 d Salaries Salaries Payable Cash $ 31,500 $ 6,250 $ 37,750 e Miscellaneous expense cash $ 20,400 $ 20,400 f Equipment $ 10,500 Cash $ 10,500 8 Dividends $ 2,475 Cash $ 2,475 $ 755 Salaries Salaries Payable $ 755 $ 1,600 Depreciation expense Accumulated depreciation $ 1,600

Equipment $ 16,000 $ 10,500 $ Bal f 740 d B Bal a Cash $ 33,200 $ 72,800 $ 22,300 $ 8,000 $ 37,750 $ 20,400 $ 10,500 $ 2,475 f Bal $ 26,500 с Common Stock B Bal с $ 41,500 $ 8,000 Bal $ 65,175 Bal $ 49,500 B Bal a Accounts Recievable $ 10,500 b $ 22,300 $ 31,200 d Salaries expense $ 31,500 $ 755 Bal $ 19,400 g Bal $ 32,255 Accumulated Depreciation B Bal $ g $ 4,800 1,600 d $ Salaries payable 6,250 B Bal g $ 6,250 $ 755 Bal $ $ 6,400 Bal $ 755 Retained earnings B Bal $ 7,150 Dividends 2,475 Bal $ Miscellaneous expense $ 20,400 $ 20,400 Bal Depreciation expense $ 1,600 $ 1,600 Bal Service revenue Bal $ 104,000

Unadjusted Trial Balance $ 33,200 $ 10,500 $ 16,000 Cash Accounts recievable Equipment Accumulated depreciation Salaries Payable Common Stock Retained earnings $ 4,800 $ 6,250 $ 41,500 $ 7,150 $ 59,700 $ 59,700 Adjusted Trial Balance $ 65,175 $ 19,400 $ 26,500 Cash Accounts recievable Equipment Accumulated depreciation Salaries Payable Common Stock Retained earnings Salaries Expense Dividends Miscellaneous expense Depreciation expense Service revenue $ 6,400 $ 755 $ 49,500 $ 7,150 $ 32,255 $ 2,475 $ 20,400 $ 1,600 $ 104,000 $ 167,805 $ 167,805

Post closing Trial Balance $ 65,175 $ 19,400 $ 26,500 Cash Accounts recievable Equipment Accumulated depreciation Salaries Payable Common Stock Retained earnings $ 6,400 $ 755 $ 49,500 $ 54,420 $ 111,075 $ 111,075

Income STmt Revenue Service Revenue $ 104,000 Expense Miscellaneous expense $ 20,400 Depreciation expense $ 1,600 Salaries Expense $ 32,255 $ 54,255 Net Income $ 49,745

Balance Sheet Liablities Asset $ 755 Cash Accounts recievable Equipment $ Accumulated depreciation $ $ 65,175 Salaries Payable $ 19,400 26,500 Equity 6,400 $ 20,100 Common Stock Retained earnings $ $ 49,500 54,420 $ 104,675 $ 104,675