[The following information applies to the questions displayed below.] The genera
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[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 Cash Accounts receivable Equipment Accumulated depreciation Salaries payable Common stock Retained earnings Debits Credits 32,900 11,000 17,000 5,100 6,500 42,000 7,300 Total 60,900 60,900 The following is a summary of the transactions for the year: a. Sales of services, $106,000, of which $31,800 was on credit. b. Collected on accounts receivable, $22,600. C. Issued shares of common stock in exchange for $8,500 in cash. d. Paid salaries, $38,500 (of which $6,500 was for salaries payable). e. Paid miscellaneous expenses, $20,800. f. Purchased equipment for $11,000 in cash. g. Paid $2,525 in cash dividends to shareholders. 1. Accrued salaries at year-end amounted to $770. 2. Depreciation for the year on the equipment is $1,700.Explanation / Answer
Karlin Company Income Statement for the Year ended Dec 31.2016. Details Amt $ Service Revenue 106,000 Less Expenses: Salaries 32,770 Misc Expenses 20,800 Depreciation of Equipment 1,700 Total Expenses 55,270 Net Income 50,730 Karlin Company Balance sheet As on Dec 31.2016. Details Amt $ Assets Cash 65,375 Accounts Receivable 20,200 Equipment 28,000 Accumulated Depreciation (6,800) Total Assets 106,775 Liabilities & Equity Salaries Payable 770 Common Stock 50,500 Retained Earning 55,505 Total Liabilities & Equity 106,775
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