The general ledger of the Karlin Company, a consulting company, at January 1, 20

Question

The general ledger of the Karlin Company, a consulting company, at January 1, 2018, contained the following account balances:

   

The following is a summary of the transactions for the year:

Sales of services, $120,000, of which $36,000 was on credit.

Collected on accounts receivable, $24,700.

Issued shares of common stock in exchange for $12,500 in cash.

Paid salaries, $43,750 (of which $8,250 was for salaries payable).

Paid miscellaneous expenses, $23,600.

Purchased equipment for $14,500 in cash.

Paid $2,900 in cash dividends to shareholders.

Accrued salaries at year-end amounted to $875.

Depreciation for the year on the equipment is $2,400.

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.

Account Title Debits Credits Cash 30,800 Accounts receivable 14,500 Equipment 24,000 Accumulated depreciation 7,200 Salaries payable 8,250 Common stock 45,500 Retained earnings 8,350 Total 69,300 69,300

Explanation / Answer

2,5 & 8 )

In the books of Karlin Company

Journal Entries

3.)

4)

Karlin Company

Unadjusted Trial Balance

January 01, 2018 (Amounts in $)

6.)

Karlin Company

Adjusted Trial Balance

December 31, 2018 (Amounts in $)

7-a.)

7-b.)

8.)

Karlin Company

Post-Closing Trial Balance

December 31, 2018 (Amount in $)

(Amount in $) Sl No Particulars L/F Debit Credit 1 Cash A/c Dr 84,000 Accounts Receivables A/c 36,000 To Sales 1,20,000 {Being cash sales and receivables accounted} 2 Cash A/c Dr 24,700 To Accounts Receivables A/c 24,700 {Being account receivables collected accounted} 3 Cash A/c Dr 12,500 To Common Stock A/c 12,500 {Being issue of common stock against cash accounted} 4 Salary Payable A/c Dr 8,250 Salary A/c Dr 35,500 To Cash 43,750 {Being salary paid in cash accounted} 5 Miscellaneous Expenses A/c Dr 23,600 To Cash 23,600 {Being miscellaneous expenses paid in cash accounted} 6 Equipment A/c Dr 14,500 To Cash 14,500 {Being purchase of equipment for cash accounted} 7 Dividend A/c Dr 2,900 To Cash 2,900 {Being dividend paid in cash accounted} 8 Salary A/c Dr 875 To Salary Payable A/c 875 {Being accrued salary for the year accounted} 9 Depreciation A/c Dr 2,400 To Equipment A/c 2,400 {Being depreciaiton for the year accounted} Total 2,45,225 2,45,225

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