The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following

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The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances:

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The following is a summary of the transactions for the year:a. Service revenue, $100,000, of which $30,000 was on account and the balance was received in cash.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 at the end of the prior year).e. Paid miscellaneous expense for various items, $24,000.f. Purchased equipment for $15,000 in cash.g. Paid $2,500 in cash dividends to shareholders.

Required:1. Set up the necessary T-accounts and enter the beginning balances from the trial balance.2. Prepare a general journal entry for each of the summary transactions listed above.

3. Post the journal entries to the accounts.4. Prepare an unadjusted trial balance.5. Prepare and post adjusting journal entries. Accrued salaries at year-end amounted to $1,000. Depreciation for the year on the equipment is $2,000.6. Prepare an adjusted trial balance.7. Prepare an income statement for 2021 and a balance sheet as of December 31, 2021.8. Prepare and post-closing entries.9. Prepare a post-closing trial balance.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Intermediate Accounting

ISBN: 978-1260481952

10th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

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