Question

In: Accounting

The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the...

The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances:

   

Account Title Debits Credits
Cash 28,700
Accounts receivable 18,000
Equipment 31,000
Accumulated depreciation 9,300
Salaries payable 10,000
Common stock 49,000
Retained earnings 9,400
Total 77,700 77,700

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

  1. Service revenue, $134,000, of which $40,200 was on account and the balance was received in cash.
  2. Collected on accounts receivable, $26,800.
  3. Issued shares of common stock in exchange for $16,000 in cash.
  4. Paid salaries, $49,000 (of which $10,000 was for salaries payable at the end of the prior year).
  5. Paid miscellaneous expense for various items, $26,400.
  6. Purchased equipment for $18,500 in cash.
  7. Paid $3,250 in cash dividends to shareholders.
  1. Accrued salaries at year-end amounted to $980.
  2. Depreciation for the year on the equipment is $3,100.


Required:

Post the transactions, adjusting and closing entries into the appropriate t-accounts.

Solutions

Expert Solution

Journal entries:
Service revenue, $134,000, of which $40,200 was on account and the balance was received in cash.

Debit - Cash... $93,800
Debit - Accounts receivable.. $40,200
Credit - Service revenue......... $134,000

Collected on accounts receivable, $26,800.

Debit - Cash..... $26,800
Credit - Accounts receivable..... $26,800

Issued shares of common stock in exchange for $16,000 in cash.

Debit - Cash.... $16,000
Credit - Common stock....... $16,000

Paid salaries, $49,000 (of which $10,000 was for salaries payable at the end of the prior year).

Debit - Salaries expense.... $39,000
Debit - Salaries payable.... $10,000
Credit - Cash............ $49,000

Paid miscellaneous expense for various items, $26,400.

Debit - Miscellaneous expense.... $26,400
Credit - Cash.............. $26,400

Purchased equipment for $18,500 in cash.

Debit - Equipment.... $18,500
Credit - Cash.................. $18,500

Paid $3,250 in cash dividends to shareholders.

Debit - Dividends...... $3,250
Credit - Cash........................ $3,250

Adjusting entries:
Accrued salaries at year-end amounted to $980.

Debit - Salaries expense.... $980
Credit - Salaries payable............. $980

Depreciation for the year on the equipment is $3,100.

Debit - Depreciation expense.... $3,100
Credit - Accumulated depreciation............. $3,100

Closing entries:

To close revenue account:

Debit - Service revenue....... $134,000
Credit - Income Summary........ $134,000

To close expenses account:

Debit - Income Summary...... $69,480
Credit - Salaries expense($39,000+$980).......... $39,980
Credit - Miscellaneous expense......... $26,400
Credit - Depreciation expense............. $3,100

To close income summary (Net income/loss) :

Debit - Income Summary...... $64,520
Credit - Retained earnings........... $64,520

(Net income = Revenues - Expenses = $134,000 - $69,480 = $64,520)

To close dividends:

Debit - Retained earnings.... $3,250
Credit - Dividends.............. $3,250

posting to t-accounts:


Related Solutions

The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the...
The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances:     Account Title Debits Credits Cash 28,700 Accounts receivable 18,000 Equipment 31,000 Accumulated depreciation 9,300 Salaries payable 10,000 Common stock 49,000 Retained earnings 9,400 Total 77,700 77,700 The following is a summary of the transactions for the year: Service revenue, $134,000, of which $40,200 was on account and the balance was received in cash. Collected on accounts receivable, $26,800. Issued shares...
The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the...
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: Service revenue, $126,000, of which $37,800 was on account and the balance was received in cash. Collected on accounts receivable, $25,600. Issued shares...
The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the...
The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances: Account Title Debits Credits Cash 30,000 Accounts receivable 15,000 Equipment 20,000 Accumulated depreciation 6,000 Salaries payable 9,000 Common stock 40,500 Retained earnings 9,500 Total 65,000 65,000 The following is a summary of the transactions for the year: Service revenue, $100,000, of which $30,000 was on account and the balance was received in cash. Collected on accounts receivable, $27,300. Issued shares of...
The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the...
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: Service revenue, $136,000, of which $40,800 was on account and the balance was received in cash. Collected on accounts receivable, $27,100. Issued shares...
The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the...
The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances: Accounts Debit Credit Cash 30,000 Accounts Receivable 15,000 Equipment 20,000 Accumulated Depreciation 6,000 Salaries Payable 9,000 Common Stock 40,500 Retained Earnings 9,500 Total 65,000 65,000 The following is a summary of the transactions for the year: a. Service revenue, $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...
The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the...
The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances: Account Title Debits Credits Cash 30,000 Accounts receivable 15,000 Equipment 20,000 Accumulated depreciation 6,000 Salaries payable 9,000 Common stock 40,500 Retained earnings 9,500 Total 65,000 65,000 The following is a summary of the transactions for the year: Service revenue, $100,000, of which $30,000 was on account and the balance was received in cash. Collected on accounts receivable, $27,300. Issued shares of...
The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the...
The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances:     Account Title Debits Credits Cash 28,700 Accounts receivable 18,000 Equipment 31,000 Accumulated depreciation 9,300 Salaries payable 10,000 Common stock 49,000 Retained earnings 9,400 Total 77,700 77,700 The following is a summary of the transactions for the year: Service revenue, $134,000, of which $40,200 was on account and the balance was received in cash. Collected on accounts receivable, $26,800. Issued shares...
The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the...
The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances:     Account Title Debits Credits Cash 28,700 Accounts receivable 18,000 Equipment 31,000 Accumulated depreciation 9,300 Salaries payable 10,000 Common stock 49,000 Retained earnings 9,400 Total 77,700 77,700 The following is a summary of the transactions for the year: Service revenue, $134,000, of which $40,200 was on account and the balance was received in cash. Collected on accounts receivable, $26,800. Issued shares...
The general ledger of the Karlin Company, a consulting company, at January 1, 2018, contained the...
The general ledger of the Karlin Company, a consulting company, at January 1, 2018, contained the following account balances: Account Title Debits Credits Cash 30,000 Accounts receivable 15,000 Equipment 20,000 Accumulated depreciation 6,000 Salaries payable 9,000 Common stock 40,500 Retained earnings 9,500 Total 65,000 65,000 The following is a summary of the transactions for the year: a. Sales of services, $100,000, of which $30,000 was on credit. b. Collected on accounts receivable, $27,300. c. Issued shares of common stock in...
The general ledger of the Karlin Company, a consulting company, at January 1, 2018, contained the...
The general ledger of the Karlin Company, a consulting company, at January 1, 2018, contained the following account balances: Account Title Debits Credits Cash 30,200 Accounts receivable 15,500 Equipment 26,000 Accumulated depreciation 7,800 Salaries payable 8,750 Common stock 46,500 Retained earnings 8,650 Total 71,700 71,700 The following is a summary of the transactions for the year: Sales of services, $124,000, of which $37,200 was on credit. Collected on accounts receivable, $25,300. Issued shares of common stock in exchange for $13,500...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT