In: Accounting
The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances:
Account Title | Debits | Credits | ||
Cash | 28,400 | |||
Accounts receivable | 18,500 | |||
Equipment | 32,000 | |||
Accumulated depreciation | 9,600 | |||
Salaries payable | 10,250 | |||
Common stock | 49,500 | |||
Retained earnings | 9,550 | |||
Total | 78,900 | 78,900 | ||
The following is a summary of the transactions for the year:
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.
2,5 & 8 | Summary entries: | |||||||
Ref. | General journal | Debit | Credit | |||||
a. | Cash | (plug) | 95200 | |||||
Accounts receivable | 40800 | |||||||
Service revenue | 136000 | |||||||
(Service revenue earned) | ||||||||
b. | Cash | 27100 | ||||||
Accounts receivable | 27100 | |||||||
(Collected on accounts receivable) | ||||||||
c. | Cash | 16500 | ||||||
Common stock | 16500 | |||||||
(Issued shares) | ||||||||
d. | Salaries expense | (plug) | 39500 | |||||
Salaries payable | 10250 | |||||||
Cash | 49750 | |||||||
(Salaries paid) | ||||||||
e. | Miscellaneous expense | 26800 | ||||||
Cash | 26800 | |||||||
(Miscellaneous expense paid) | ||||||||
f. | Equipment | 19000 | ||||||
Cash | 19000 | |||||||
(Purchased equipment) | ||||||||
g. | Dividends | 3300 | ||||||
Cash | 3300 | |||||||
(Dividend paid) | ||||||||
Adjusting entries: | ||||||||
Ref. | General journal | Debit | Credit | |||||
1 | Salaries expense | 995 | ||||||
Salaries payable | 995 | |||||||
(Salaries accrued) | ||||||||
2 | Depreciation expense | 3200 | ||||||
Accumulated depreciation | 3200 | |||||||
(Depreciation recorded) | ||||||||
Clsong entries: | ||||||||
Ref. | General journal | Debit | Credit | |||||
Cl-1. | Income summary | 70495 | ||||||
Miscellaneous expense | 26800 | |||||||
Depreciation expense | 3200 | |||||||
Salaries expense | 40495 | |||||||
(Expense accounts closed) | ||||||||
Cl-2. | Service revenue | 136000 | ||||||
Income summary | 136000 | |||||||
(Revenue account closed) | ||||||||
Cl-3. | Income summary | (136000-70495) | 65505 | |||||
Retained earnings | 65505 | |||||||
(Income summary closed) | ||||||||
Cl-4. | Retained earnings | 3300 | ||||||
Dividends | 3300 | |||||||
(Dividend account closed) |