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

ID: 2451727 • Letter: T

Question

The general ledger of the Karlin Company, a consulting company, at January 1, 2013, contained the following account balances

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 exchange for $10,000 in cash.

d. Paid salaries, $50,000 (of which $9,000 was for salaries payable).

e. Paid miscellaneous expenses, $24,000.

f. Purchased equipment for $15,000 in cash.

g. Paid $2,500 in cash dividends to shareholders.

Required:

? Prepare a general journal entry for each of the summary transactions listed above.

? Post the journal entries to the accounts.

? Prepare an unadjusted trial balance.

? Prepare and post adjusting journal entries. Accrued salaries at year-end amounted to $1,000. Depreciation for the year on the equipment is $2,000.

? Prepare an adjusted trial balance.

? Prepare an income statement for 2013 and a balance sheet as of Dec 31, 2013.

? Prepare a statement of retained earnings

a) DEBTORS A/C DR 30000

BANK A/C DR 70000

TO SALES A/C 100000

B) BANK A/C DR 27300

TO DEBTORS A/C 27300

C) CASH A/C DR 10000

TO SHARE CAPITAL A/C 10000

D) SALARIES A/C DR 50000

TO BANK A/C 41000

TO SALARY PAYABLE A/C 9000

E) MISC EXP A/C DR 24000

TO BANK A/C 24000

F) EQUIPMENT A/C DR 15000

TO CASH A/C 15000

G) DIVIDENT PAID A/C 2500

TO CASH A/C 2500

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