The general ledger of the Karlin Company, a consulting company, at January 1, 2016, contained the following account balances: Account Title Debits Credits Cash 30,000 15,000 20,000 Accounts receivable Equipment Accumulated depreciation Salaries payable 6,000 9,000 40,500 Common stock Retained earnings 9,500 Total 65,000 65,000
The general ledger of the Karlin Company, a consulting company, at January 1, 2016, contained the following account balances: Account Title Debits Credits Cash 30,000 15,000 20,000 Accounts receivable Equipment Accumulated depreciation Salaries payable 6,000 9,000 40,500 Common stock Retained earnings 9,500 Total 65,000 65,000
The general ledger of the Karlin Company, a consulting company, at January 1, 2016, contained the following account balances: Account Title Debits Credits Cash 30,000 15,000 20,000 Accounts receivable Equipment Accumulated depreciation Salaries payable 6,000 9,000 40,500 Common stock Retained earnings 9,500 Total 65,000 65,000
The following is a summary of the transactions for the year: a. Sales of services, $100,000, of which $30,000 was on credit. b. Collected on accounts receivable, $27,300. c. Issued shares of common stock in exchange for $10,000 in cash. d. Paid salaries, $50,000 (of which $9,000 was for salaries payable). e. Paid miscellaneous expenses, $24,000. f. Purchased equipment for $15,000 in cash. g. Paid $2,500 in cash dividends to shareholders. Required: 1. Set up the necessary T-accounts and enter the beginning balances from the trial balance. 2. Prepare a general journal entry for each of the summary transactions listed above. 3. Post the journal entries to the accounts. 4. Prepare an unadjusted trial balance. 5. Prepare and post adjusting journal entries. Accrued salaries at year-end amounted to $1,000. Depreciation for the year on the equipment is $2,000. 6. Prepare an adjusted trial balance. 7. Prepare an income statement for 2016 and a balance sheet as of December 31, 2016. 8. Prepare and post closing entries. 9. Prepare a post-closing trial balance.
Transcribed Image Text:The general ledger of the Karlin Company, a consulting company, at January 1, 2016, contained the following
account balances:
Account Title
Debits
Credits
Cash
30,000
15,000
20,000
Accounts receivable
Equipment
Accumulated depreciation
Salaries payable
6,000
9,000
40,500
Common stock
Retained earnings
9,500
Total
65,000
65,000
Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.
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