The general ledger of the Karlin Company, a consulting company, at January 1, 2024, contained the following account balances: Account Title Cash Accounts receivable Equipment Accumulated depreciation Salaries payable Common stock Retained earnings Total Debits $30,000 15,000 20,000 $65,000 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. Credits $ 6,000 9,000 40,500 9,500 $65,000 The following is a summary of the transactions for the year: a. Provided services, $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). 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 2024 and a balance sheet as of December 31, 2024. 8. Prepare and post-closing entries. 9. Prepare a post-closing trial balance.
The general ledger of the Karlin Company, a consulting company, at January 1, 2024, contained the following account balances: Account Title Cash Accounts receivable Equipment Accumulated depreciation Salaries payable Common stock Retained earnings Total Debits $30,000 15,000 20,000 $65,000 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. Credits $ 6,000 9,000 40,500 9,500 $65,000 The following is a summary of the transactions for the year: a. Provided services, $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). 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 2024 and a balance sheet as of December 31, 2024. 8. Prepare and post-closing entries. 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, 2024, contained the following
account balances:
Account Title
Cash
Accounts receivable
Equipment
Accumulated depreciation
Salaries payable
Common stock
Retained earnings
Total
Debits
$30,000
15,000
20,000
f. Purchased equipment for $15,000 in cash.
g. Paid $2,500 in cash dividends to shareholders.
$65,000
Credits
$6,000
9,000
40,500
9,500
$65,000
The following is a summary of the transactions for the year:
a. Provided services, $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.
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 2024 and a balance sheet as of December 31, 2024.
8. Prepare and post-closing entries.
9. Prepare a post-closing trial balance.
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