The general ledger of the Karlin Company, a consulting company, at January 1, 20

Question

The general ledger of the Karlin Company, a consulting company, at January 1, 2018, contained the following account balances Cash Accounts receivable 3.500 1e,ee0 15,000 Accusulated depreciation Salaries payable Common stock 4, 580 6,009 41,000 Total 58,508 58,589 The following is a summary of the transactions for the year a. Sales of services, $102.000, of which $30.600 was on credit b. Collected on accounts receivable, $22,000. c. Issued shares of common stock in exchange for $7,500 in cash d. Paid salaries, $37,000 (of which $6,000 was for salaries payable) e. Paid miscellaneous expenses, $20.000 f. Purchased equipment for $10,000 in cash g. Paid $2.425 in cash dividends to shareholders 1. Accrued salaries at year-end amounted to $740. 2 Depreciation for the year on the equipment is $1,500. Required: 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 f-accounts 4. Prepare an unadjusted trial balance 6. Prepare an adjusted trial balance. 7-a. Prepare an income statement for 2018 7-b. Prepare a balance sheet as of December 31, 2018. 9. Prepare a post-closing trial balance Complete this question by entering your answers in the tabs below Req 6 Reg 7ARed 78Reg 9 Req 3 Req 4 Req 2 5 and 8 Post the transactions, adjusting and closing entries into the appropriate t-accounts, (Enter the letter of the transaction in the

Explanation / Answer

Required 2, 5 & 8 Prepare the summary, adjusting and closing entries for each of the transactions listed 1 Cash $71,400 Accounts Receivable $30,600 To Service Revenue $102,000 (Being sale of services recorded) 2 Cash $22,000 To Accounts receivable $22,000 (Being cash received from accounts receivable) 3 Cash $7,500 To Common Stock $7,500 (Being common stock issued) 4 Salaries Payable $6,000 Salaries Expense $31,000 To Cash $37,000 (Being Salary expense recorded and paid) 5 Miscellaneous Expenses $20,000 To Cash $20,000 (Being Miscellaneous expenses paid) 6 Equipment $10,000 To Cash $10,000 (Being equipment purchased and paid) 7 Retained Earnings $2,425 To Cash $2,425 (Being dividend paid) 8 Salaries Expense $740 To Salaries Payable $740 (Being accrued salary recorded) 9 Depreciation $1,500 To Accumulated Depreciation $1,500 (Being depreciation recorded) 10 Service Revenue $102,000 To Income summary $102,000 (Being adjusted entry for service revenue recorded) 11 Income Summary $53,240 To Salaries Expense $31,740 To Miscellaneous Expense $20,000 To Depreciation Expense $1,500 (Being adjusted entry for expenses) 12 Income Summary $48,760 To Retained Earnings $48,760 (Being income transferred to retained earnings) Required 3 Post the transaction adjusting and closing entries into the appropriate t-accounts Cash Op Bal $33,500 Salaries Payable $6,000 Service Revenue $71,400 Salaries Expense $31,000 Accounts Receivable $22,000 Miscellaneous Expense $20,000 Common Stock $7,500 Equipment $10,000 Dividend $2,425 Closing Bal $64,975 $134,400 $134,400 Accounts Receivable Op Bal $10,000 Cash $22,000 Service Revenue $30,600 Closing Bal $18,600 $40,600 $40,600 Equipment Op Bal $15,000 Cash $10,000 Closing Bal $25,000 $25,000 $25,000 Accumulated Depreciation Op Bal $4,500 Closing Bal $6,000 Depreciation $1,500 $6,000 $6,000 Salaries Payable Cash $6,000 Op Bal $6,000 Salaries Expense $740 Closing Bal $740 $6,740 $6,740 Common Stock Op Bal $41,000 Closing Bal $48,500 Cash $7,500 $48,500 $48,500 Retained Earnings Dividend $2,425 Op Bal $7,000 Closing Bal $53,335 Income Summary $48,760 $55,760 $55,760 Service Revenue Cash $71,400 Income Summary $102,000 Accounts Receivable $30,600 $102,000 $102,000 Salaries Expense Cash $31,000 Salaries Payable $740 Income Summary $31,740 $31,740 $31,740 Miscellaneous Expense Cash $20,000 Income Summary $20,000 $20,000 $20,000 Depreciation Accumulated Depreciation $1,500 Income Summary $1,500 $1,500 $1,500 Required 4 Prepare an unadjusted trial balance Karlin Company Unadjusted trial balance Debit Credit 51000 Cash $64,975 7000 Accounts Receivable $18,600 58000 Equipment $25,000 2425 Accumulated Depreciation $4,500 55575 Salaries Payable $0 Common Stock $48,500 Retained Earnings $7,000 Service Revenue $102,000 Salaries Expense $31,000 Miscellaneous Expense $20,000 Dividend $2,425 $162,000 $162,000 Required 6 Prepare an adjusted trial Balance Karlin Company Adjusted Trial Balance Cash $64,975 Accounts Receivable $18,600 Equipment $25,000 Accumulated Depreciation $6,000 Salaries Payable $740 Common Stock $48,500 Retained Earnings $7,000 Service Revenue $102,000 Salaries Expense $31,740 Miscellaneous Expense $20,000 Depreciation $1,500 Dividend $2,425 $164,240 $164,240 Required 7-a Karlin Company Income Statement for 2018 Service Revenue $102,000 Less: Salaries Expense $31,740 Miscellaneous Expense $20,000 Depreciation $1,500 $53,240 Net Profit $48,760 Dividend $2,425 Trf to Retained Earnings $46,335 Required 7-b Karlin Company Balance Sheet as of December 31, 2018 Current assets Cash $64,975 Accounts Receivable $18,600 Total Current Assets 83575 Equipment $25,000 Less : Accumulated Depreciation ($6,000) Equipment, Net $19,000 Total Assets 102575 Salaries Payable $740 Common Stock $48,500 Retained Earnings $53,335 Total Liabilities and Equities $102,575 Required 9 Post Closing Trial Balance Karlin Company Post closing trial balance Cash $64,975 Accounts Receivable $18,600 Equipment $25,000 Accumulated Depreciation $6,000 Salaries Payable $740 Common Stock $48,500 Retained Earnings $53,335 Service Revenue $0 Salaries Expense $0 Miscellaneous Expense $0 Depreciation $0 $108,575 $108,575

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