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
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