The general ledger of the Karlin Company, a consulting

The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances:

Account Title Debits Credits
Cash 29,000
Accounts receivable 17,500
Equipment 30,000
Accumulated depreciation 9,000
Salaries payable 9,750
Common stock 48,500
Retained earnings 9,250
Total 76,500 76,500

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

  1. Service revenue, $132,000, of which $39,600 was on account and the balance was received in cash.
  2. Collected on accounts receivable, $26,500.
  3. Issued shares of common stock in exchange for $15,500 in cash.
  4. Paid salaries, $48,250 (of which $9,750 was for salaries payable at the end of the prior year).
  5. Paid miscellaneous expense for various items, $26,000.
  6. Purchased equipment for $18,000 in cash.
  7. Paid $3,200 in cash dividends to shareholders.
  8. Accrued salaries at year-end amounted to $965.
  9. Depreciation for the year on the equipment is $3,000.


Required:

1. Prepare the summary, adjusting and closing entries for each of the transactions listed.
2. Post the transactions, adjusting and closing entries into the appropriate t-accounts.
3. Prepare an unadjusted trial balance.
4. Prepare an adjusted trial balance.
4-a. Prepare an income statement for 2021.
4-b. Prepare a balance sheet as of December 31, 2021.
5. Prepare a post-closing trial balance.

Please answer questions in a journal:

Sales of services, $132,000, of which $39,600 was on credit.

Collected on accounts receivable, $26,500.

Issued shares of common stock in exchange for $15,500 in cash.

Paid salaries, $48,250 (of which $9,750 was for salaries payable).

Paid miscellaneous expenses, $26,000.

Purchased equipment for $18,000 in cash.

Paid $3,200 in cash dividends to shareholders.

Record the adjusting journal entry for accrued salaries at year-end that amounted to $965.

Record the adjusting journal entry for annual depreciation of $3,000.

Record the entry to close the revenue accounts using the retained earnings account.

Record the entry to close the expense accounts using the retained earnings account.

Record the entry to close the dividends account.

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