Question
The general ledger of the Karlin Company, a consulting company, at January 1, 2018, contained the following account balances: Account Title Debits Credits Cash 30,000
The general ledger of the Karlin Company, a consulting company, at January 1, 2018, contained the following account balances:
Account Title | Debits | Credits | |
Cash | 30,000 | ||
Accounts receivable | 15,000 | ||
Equipment | 20,000 | ||
Accumulated depreciation | 6,000 | ||
Salaries payable | 9,000 | ||
Common stock | 40,500 | ||
Retained earnings | 9,500 | ||
Total | 65,000 | 65,000 | |
The following is a summary of the transactions for the year:
Sales of services, $100,000, of which $30,000 was on credit.
Collected on accounts receivable, $27,300.
Issued shares of common stock in exchange for $10,000 in cash.
Paid salaries, $50,000 (of which $9,000 was for salaries payable).
Paid miscellaneous expenses, $24,000.
Purchased equipment for $15,000 in cash.
Paid $2,500 in cash dividends to shareholders.
Accrued salaries at year-end amounted to $1,000.
Depreciation for the year on the equipment is $2,000.
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 t-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.
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