Prepare an unadjusted trial balance

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Reference no: EM132865134

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 29,000

Accounts receivable 17,500

Equipment 30,000

Accumulated depreciation 9,000

Salaries payable 9,750

Common stock 48,500

Retained earnings 9,250

Total 76,500 76,500

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

-Service revenue, $132,000, of which $39,600 was on account and the balance was received in cash.

-Collected on accounts receivable, $26,500.

-Issued shares of common stock in exchange for $15,500 in cash.

-Paid salaries, $48,250 (of which $9,750 was for salaries payable at the end of the prior year).

-Paid miscellaneous expense for various items, $26,000.

-Purchased equipment for $18,000 in cash.

-Paid $3,200 in cash dividends to shareholders.

-Accrued salaries at year-end amounted to $965.

-Depreciation for the year on the equipment is $3,000.

Required -

1. Prepare the summary, adjusting and closing entries for each of the transactions listed.

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

3. Prepare an unadjusted trial balance.

4. Prepare an adjusted trial balance.

5-a. Prepare an income statement for 2021.

5-b. Prepare a balance sheet as of December 31, 2021.

6. Prepare a post-closing trial balance.

Reference no: EM132865134

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