Karlin Company Problem



The general ledger of the Karlin Company, a consulting company, at January 1, 2011, contained the following account balances:

The following is a summary of the transactions for the year: a. Sales of services, $100,000, of which $30,000 was on credit.

b. Collected on accounts receivable, $27,300.

c. Issued shares of common stock in exchange for $10,000 in cash.

d. Paid salaries, $50,000 (of which $9,000 was for salaries payable).

e. Paid miscellaneous expenses, $24,000.

f. Purchased equipment for $15,000 in cash.

g. Paid $2,500 in cash dividends to shareholders.

Requirement :

Prepare a general journal entry for each of the summary transactions listed above.

Prepare an unadjusted trial balance

Prepare and post adjusting journal entries. Post to offline T-accounts. Accrued salaries at year-end amounted to $1,000. Depreciation for the year on the equipment is $2,000. The allowance for uncollectible accounts is estimated to be $1,500

Prepare an adjusted trial balance

Prepare an income statement for 2011 and a balance sheet as of December 31, 2011

Prepare and post closing entries

Prepare a post-closing trial balance


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