Question

The general ledger of the Karlin Company, a consulting company, at January 1, 2018, contained the following account balances:
Account Title Debits Credits
Cash 31,100
Accounts receivable 14,000
Equipment 23,000
Accumulated depreciation 6,900
Salaries payable 8,000
Common stock 45,000
Retained earnings 8,200
Total 68,100 68,100
The following is a summary of the transactions for the year:
a. Sales of services, $118,000, of which $35,400 was on credit.
b. Collected on accounts receivable, $24,400.
c. Issued shares of common stock in exchange for $12,000 in cash.
d. Paid salaries, $43,000 (of which $8,000 was for salaries payable).
e. Paid miscellaneous expenses, $23,200.
f. Purchased equipment for $14,000 in cash.
g. Paid $2,850 in cash dividends to shareholders.
1. Accrued salaries at year-end amounted to $860.
2. Depreciation for the year on the equipment is $2,300.
R equired:
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 fo r 2018.
7-b. Prepare a balance sheet as of Dec

Post the transactions, adjusting and closing entries into the appropriate t-accounts. (Enter the letter of the transaction in the
column next to the amount.)

what is income summary?

Answer 1

Solution   2					Solution 3
Journal Entries					Cash					Accounts Receivable
Event	General Journal	Debit	Credit		To balance b/d	31100	By Salaries Expense	35000		To balance b/d	14000	By Cash	24400
a	Cash	$82,600			To Service Revenue	82600	By Salaries Payable	8000		To Service Revenue	35400
	Accounts Receivable	$35,400			To Accounts Receivable	24400	By Mise.Expenses	23200
	Service Revenue		$118,000		To Common stock	12000	By Equipment	14000				By balance c/f	25000
							By Dividend	2850			49400		49400
b	Cash	$24,400
	Accounts Receivable		$24,400				By balance c/f	67050		Accumulated Depreciation
						150100		150100				By balance b/d	6900
c	Cash	$12,000										By Depreciation Expense	2300
	Common stock		$12,000		Equipment
					To balance b/d	23000				To balance c/f	9200
d	Salaries Expense	$35,000			To Cash	14000							9200
	Salaries Payable	$8,000
	Cash		$43,000				By balance c/f	37000		Common stock
						37000		37000				By balance b/d	45000
e	Miscellaneous Expenses	$23,200										By Cash	12000
	Cash		$23,200		Salaries Payable
					To Cash	8000	By balance b/d	8000		To balance c/f	57000
f	Equipment	$14,000					By Salaries Expense	860			57000		57000
	Cash		$14,000
					To balance c/f	860				Service Revenue
g	Dividend	$2,850				8860		8860				By Cash	82600
	Cash		$2,850									By Accounts Receivable	35400
					Retained Earnings
1	Salaries Expense	$860					By balance b/d	8200		To balance c/f	118000
	Salaries Payable		$860		To Dividend	2850	By Net Income	56640			118000		118000
2	Depreciation Expense	$2,300			To balance c/f	61990				Depreciation Expense
	Accumulated Depreciation		$2,300			64840		64840		To Accumulated Depreciation	2300
					Miscellaneous Expenses
Answer 4					To Cash	23200						By balance c/f	2300
KARLIN COMPANY											2300		2300
Unadjusted Trial Balance
Account Title		Debit	Credit				By balance c/f	23200		Income Summary
Cash		$67,050				23200		23200
Accounts Receivable		$25,000
Equipment		$37,000			Salaries Expense
Accumulated Depreciation			$6,900		To Cash	35000
Salaries Payable			$0		To Salaries Payable	860
Common stock			$57,000
Retained Earnings			$5,350				By balance c/f	35860
Service Revenue			$118,000			35860		35860
Salaries Expense		$35,000
Mise.Expenses		$23,200
Totals		$187,250	$187,250
Answer 6
KARLIN COMPANY
Adjusted Trial Balance
Account Title		Debit	Credit
Cash		$67,050
Accounts Receivable		$25,000
Equipment		$37,000
Accumulated Depreciation			$9,200
Salaries Payable			$860
Common stock			$57,000
Retained Earnings			$5,350
Service Revenue			$118,000
Salaries Expense		$35,860
Mise.Expenses		$23,200
Depreciation Expense		$2,300
Totals		$190,410	$190,410
Answer 7-a
KARLIN COMPANY
Income statement
For the year ended December 31,2016
Service Revenue			$118,000
Less : Expenses
Prepaid Insurance		$0
Salaries Expense		$35,860
Mise.Expenses		$23,200
Depreciation Expense		$2,300
Bad debt		$0
Total Expenses			$61,360
Net Income			$56,640
Answer 9
KARLIN COMPANY
Post closing Trial Balance
Account Title		Debit	Credit
Cash		$67,050
Accounts Receivable		$25,000
Equipment		$37,000
Accumulated Depreciation			$9,200
Salaries Payable			$860
Common stock			$57,000
Retained Earnings			$61,990
Service Revenue			$0
Salaries Expense		$0
Mise.Expenses		$0
Depreciation Expense		$0
Totals		$129,050	$129,050