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	29,900
Accounts receivable	16,000
Equipment	27,000
Accumulated depreciation			8,100
Salaries payable			9,000
Common stock			47,000
Retained earnings			8,800
Total	72,900		72,900

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

1. Service revenue, $126,000, of which $37,800 was on account and the balance was received in cash.
2. Collected on accounts receivable, $25,600.
3. Issued shares of common stock in exchange for $14,000 in cash.
4. Paid salaries, $46,000 (of which $9,000 was for salaries payable at the end of the prior year).
5. Paid miscellaneous expense for various items, $24,800.
6. Purchased equipment for $16,500 in cash.
7. Paid $3,050 in cash dividends to shareholders.

1. Accrued salaries at year-end amounted to $920.
2. Depreciation for the year on the equipment is $2,700.

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