The general ledger of the Karlin Company, a consulting company, at January 1, 20
ID: 2561444 • Letter: T
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 29,900
Accounts Receivable 16,000
Equipment 27,000
Accumulated depreciation 8,100
Salaries payable 9,000
Common stock 47,000
Retained earnings 8,800
Total 72,900 72,900
The following is a summary of the transactions for the year:
a. Sales of services, $126,000, of which $37,800 was on credit.
b. Collected on accounts receivable, $25,600.
c. Issued shares of common stock in exchange for $14,000 in cash.
d. Paid salaries, $46,000 (of which $9,000 was for salaries payable).
e. Paid miscellaneous expenses, $24,800.
f. Purchased equipment for $16,500 in cash.
g. Paid $3,050 in cash dividends to shareholders.
1. Accrued salaries at year-end amounted to $920.
2. Depreciation for the year on the equipment is $2,700.
Required:
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.
Explanation / Answer
Adjusted Trial Balance
Particulars
Debit
Credit
Cash
29900.00
Add
Sale of services
88200.00
Add
Receipt from Accounts Receivable
25600.00
Add
Cash against issuance of shares
14000.00
Less
Paid Salaries
-37000.00
Less
Miscellaneous expense
-24800.00
Less
Purchase equipment
-16500.00
Less
Dividend Paid
-3050.00
Accounts Receivable
16000.00
Add
Credit sales
37800.00
Less
Received from accounts receivable
-25600.00
Equipment
27000.00
Add
purchase of equipment
16500.00
Accumulated depreciation
8100.00
Add
Depreciation
2700.00
Salaries payable
9000.00
Add
Increase in salary payable
9000.00
Add
Accrued Salary
920.00
Common stock
47000.00
Add
Sale of shares
14000.00
Retained earnings
8800.00
Sale of Stock
-126000.00
Expenses
Add
Salary Expense
46000.00
Add
Miscellaneous expense
24800.00
Add
Dividend
3050.00
Add
Accrued Salary
920.00
Add
Depreciation
2700.00
Total
99520.00
99520.00
Income and Expense Account
Expense
Amount
Income
Amount
Salaries
37000
Sale of services
126000
Salaries payable
9000
Accrued Salaries
920.00
Miscellaneous expense
24800.00
Dividend Paid
3050
Depreciation
2700
Net Profit
48530
TOTAL
126000
TOTAL
126000
Balance Sheet
Liabilities
Amount
Assets
Amount
Common Stock
61000
Cash
76350
Salary Payable
18920
Accounts Receivable
28200
Accumulated Depreciation
10800
Equipment
43500
Retained Earnings
8800
Net Profit
48530
Total
148050
Total
148050
Adjusted Trial Balance
Particulars
Debit
Credit
Cash
29900.00
Add
Sale of services
88200.00
Add
Receipt from Accounts Receivable
25600.00
Add
Cash against issuance of shares
14000.00
Less
Paid Salaries
-37000.00
Less
Miscellaneous expense
-24800.00
Less
Purchase equipment
-16500.00
Less
Dividend Paid
-3050.00
Accounts Receivable
16000.00
Add
Credit sales
37800.00
Less
Received from accounts receivable
-25600.00
Equipment
27000.00
Add
purchase of equipment
16500.00
Accumulated depreciation
8100.00
Add
Depreciation
2700.00
Salaries payable
9000.00
Add
Increase in salary payable
9000.00
Add
Accrued Salary
920.00
Common stock
47000.00
Add
Sale of shares
14000.00
Retained earnings
8800.00
Sale of Stock
-126000.00
Expenses
Add
Salary Expense
46000.00
Add
Miscellaneous expense
24800.00
Add
Dividend
3050.00
Add
Accrued Salary
920.00
Add
Depreciation
2700.00
Total
99520.00
99520.00
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