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) |





