Required:
3. Post the transactions, adjusting and closing entries into the appropriate t-accounts.
7-a. Prepare an income statement for 2021. 7-b. Prepare a balance sheet as of December 31, 2021.
The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances: Credits Debits 30,500 15,000 25,000 Account Title Cash Accounts receivable Equipment Accumulated depreciation Salaries payable Common stock Retained earnings Total 7,500 8,500 46,000 8,500 70,500 70,500 The following is a summary of the transactions for the year: a. Service revenue, $122,000, of which $36,600 was on account and the balance was received in cash. b. Collected on accounts receivable, $25,000. c. Issued shares of common stock in exchange for $13,000 in cash. d. Paid salaries, $44,500 (of which $8,500 was for salaries payable at the end of the prior year). e. Paid miscellaneous expense for various items, $24,000. f. Purchased equipment for $15,500 in cash. g. Paid $2,950 in cash dividends to shareholders. 1. Accrued salaries at year-end amounted to $890. 2. Depreciation for the year on the equipment is $2,500. 1 a.. Cash 85,400 36,600 Accounts receivable Service revenue 122,000 2 b. Cash 25,000 Accounts receivable 25,000 3 C. Cash 13,000 Common stock 13,000 4 d. Salaries expense Salaries payable 36,000 8,500 Cash 44,500 5 e. Miscellaneous expense 24,000 Cash 24,000 6 f. 15,500 Equipment Cash 15,500 7 g. 2,950 Retained earnings Cash 2,950 8 h. 890 Salaries expense Salaries payable 890 Req 2 5 and 8 Req 3 Req 4 Reg 6 Prepare an unadjusted trial balance. KARLIN COMPANY Unadjusted Trial Balance Account Title Debits Credits Cash $ 66,950 26,600 Accounts receivable 40,500 Equipment Accumulated depreciation Salaries payable $ 7,500 0 Common stock 59,000 Retained earnings 5,550 Dividends 0 Service revenue 122,000 36,000 Salaries expense Miscellaneous expenses 24,000 194,050 $ Totals $ 194,050 Req 2 5 and 8 Req 3 Req 4 Req 6 Req za Prepare an adjusted trial balance. KARLIN COMPANY Adjusted Trial Balance Account Title Debits Credits Cash $ 66,950 Accounts receivable 26,600 40,500 10,000 Equipment Accumulated depreciation Salaries payable Common stock 890 59,000 5,550 Retained earnings Dividends 0 Service revenue 122,000 Salaries expense 36,890 24,000 Miscellaneous expenses Depreciation expense Totals 2,500 197,440 $ $ 197,440 Req 2 5 and 8 Req 3 Req 4 Req 6 Req ZA Req 7B Req 9 Prepare a post-closing trial balance. KARLIN COMPANY Post-Closing Trial Balance Account Title Debits Credits Cash $ 66,950 26,600 Accounts receivable 40,500 Equipment Accumulated depreciation Salaries payable $ 10,000 890 Common stock 59,000 64,160 Retained earnings Service revenue Salaries expense Miscellaneous expenses Depreciation expense Totals $ 134,050 134,050 Req 25 and 8 Req3 Req 4 Req 6 Req 7A Req 7B Req 9 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.) Cash Accounts Receivable 15,000 Beg. bal. 30,500 Beg. bal. End. bal. 30,500 End. bal. 15,000 Equipment 25,000 Accumulated Depreciation 7,500 Beg. bal. Beg. bal. End. bal. 25,000 End. bal. 7,500 Salaries Payable 8,500 Common Stock 46,000 Beg. bal. Beg. bal. End. bal. 8,500 End. bal. 46,000 Dividends Retained Earnings 8,500 Beg. bal. Beg. bal. 0 End. bal. 8,500 End. bal. Service Revenue Miscellaneous expense Beg. bal. 0 Beg. bal. 0 End. bal. End. bal. Depreciation Expense Salaries Expense Beg. bal. 0 Beg. bal. End. bal. End. bal. Req 2 5 and 8 Req3 Req 4 Req 6 Req 7A Req ZB Req 9 Prepare an income statement for 2021. KARLIN COMPANY Income Statement For the Year Ended December 31, 2021 Accounts payable Accounts receivable Accumulated depreciation Advertising expense Allowance for uncollectible accounts 0 $ 0 Req 6 Req 7B > KARLIN COMPANY Balance Sheet December 31, 2021 Assets Accounts payable 0 Accounts receivable Accumulated depreciation Advertising expense 0 Liabilities and Shareholders' Equity 0 0 $ 0
