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.