Record the entry to close the income summary account

Reference no: EM131808016

[The following information applies to the questions displayed below.]

The general ledger of the Karlin Company, a consulting company, at January 1, 2016, contained the following account balances:

Account Title	Debits	Credits
Cash	31,700
Accounts receivable	13,000
Equipment	21,000
Accumulated depreciation		6,300
Salaries payable		7,500
Common stock		44,000
Retained earnings		7,900

Total	65,700	65,700

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

a. Sales of services, $114,000, of which $34,200 was on credit.

b. Collected on accounts receivable, $23,800.

c. Issued shares of common stock in exchange for $11,000 in cash.

d. Paid salaries, $41,500 (of which $7,500 was for salaries payable).

e. Paid miscellaneous expenses, $22,400.

f. Purchased equipment for $13,000 in cash.

g. Paid $2,750 in cash dividends to shareholders.

1. Accrued salaries at year-end amounted to $830.

2. Depreciation for the year on the equipment is $2,100.

Prepare a journal entry:

Record the entry to close the income summary account.

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.)

T Accounts: Cash, Accounts Receivable, Equipment, Accumlated Depreciation, Salaries Payable, Common Stock, Retained Earnings, Service Revenue, Misc Expenses, Depreciation Expense, Salaries Expense, Income Summary.

Prepare an unadjusted trial balance.

Account Title Debit Credit

Cash

Accounts Receivable

Equipment

Accumlated Depreciation

Salaries Payable

Common Stock

Retained Earnings

Service Revenue

Salaries Expense

Miscellaneous Expenses

Totals

Prepare an adjusted trial balance.

Account Title Debit Credit

Cash

Accounts Receivable

Equipment

Accumlated Depreciation

Salaries Payable

Common Stock

Retained Earnings

Service Revenue

Salaries Expense

Miscellaneous Expenses

Totals

Prepare an income statement for Dec 31, 2016.

Prepare a balance sheet for Dec 31, 2016

Prepare a post-closing trial balance.

Reference no: EM131808016

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