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The general ledger of the Karlin Company, a consulting company, at January 1, 2024, contained the following account balances: Account Title Debits Credits Cash $

The general ledger of the Karlin Company, a consulting company, at January 1, 2024, 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:

  1. Provided services, $100,000, of which $30,000 was on account and the balance was received in cash.
  2. Collected on accounts receivable, $27,300.
  3. Issued shares of common stock in exchange for $10,000 in cash.
  4. Paid salaries, $50,000 (of which $9,000 was for salaries payable at the end of the prior year).
  5. Paid miscellaneous expense for various items, $24,000.
  6. Purchased equipment for $15,000 in cash.
  7. Paid $2,500 in cash dividends to shareholders.

Additional information:

  1. Accrued salaries at year-end amounted to $1,000.
  2. Depreciation for the year on the equipment is $2,000.

Required:

1 to 3. Prepare a general journal entry for each of the summary transactions listed. Record beginning balances in the T-accounts (on the T-accounts tab). Post the journal entries to the T-accounts.

4. Using the T-account balances, prepare an unadjusted trial balance.

5. Prepare adjusting journal entries using the additional information provided. Post to the T-accounts (on the T-accounts tab).

6. Using the adjusted T-account balances, prepare an adjusted trial balance.

7-a. Prepare an income statement for 2024.

7-b. Prepare a balance sheet as of December 31, 2024.

8. Prepare closing entries, and then post to the T-accounts (on the T-accounts tab).

9. Prepare a post-closing trial balance.

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