The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances: Account Title Debits Credits Cash 30,000 15,000 Accounts receivable Equipment Accumulated depreciation Salaries payable Common stock 20,000 6,000 9,000 40,500 Retained earnings 9,500 Total 65,000 65,000 The following is a summary of the transactions for the year: a. Service revenue, $100,000, of which $30,000 was on account and the balance was received in cash. 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 at the end of the prior year). e. Paid miscellaneous expense for various items, $24,000. f. Purchased equipment for $15,000 in cash. g. Paid $2,500 in cash dividends to shareholders. 1. Accrued salaries at year-end amounted to $1,000. 2. Depreciation for the year on the equipment is $2,000. 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.
The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances: Account Title Debits Credits Cash 30,000 15,000 Accounts receivable Equipment Accumulated depreciation Salaries payable Common stock 20,000 6,000 9,000 40,500 Retained earnings 9,500 Total 65,000 65,000 The following is a summary of the transactions for the year: a. Service revenue, $100,000, of which $30,000 was on account and the balance was received in cash. 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 at the end of the prior year). e. Paid miscellaneous expense for various items, $24,000. f. Purchased equipment for $15,000 in cash. g. Paid $2,500 in cash dividends to shareholders. 1. Accrued salaries at year-end amounted to $1,000. 2. Depreciation for the year on the equipment is $2,000. 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The general ledger of the Karlin Company, a consulting company, at January 1, 2021, 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
9,500
Common stock
Retained earnings
Total
65,000
65,000
The following is a summary of the transactions for the year:
a. Service revenue, $100,000, of which $30,000 was on account and the balance was received in cash.
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 at the end of the prior year).
e. Paid miscellaneous expense for various items, $24,000.
f. Purchased equipment for $15,000 in cash.
g. Paid $2,500 in cash dividends to shareholders.
1. Accrued salaries at year-end amounted to $1,000.
2. Depreciation for the year on the equipment is $2,00o.
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.
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