Question
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:
- Provided services, $100,000, of which $30,000 was on account and the balance was received in cash.
- 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 at the end of the prior year).
- Paid miscellaneous expense for various items, $24,000.
- Purchased equipment for $15,000 in cash.
- Paid $2,500 in cash dividends to shareholders.
Additional information:
- Accrued salaries at year-end amounted to $1,000.
- 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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