The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances:
Account Title Debits Credits
Cash 33,200
Accounts receivable 10,500
Equipment 16,000
Accumulated depreciation 4,800
Salaries payable 6,250
Common stock 41,500
Retained earnings 7,150
Total 59,700 59,700
The following is a summary of the transactions for the year:
Service revenue, $104,000, of which $31,200 was on account and the balance was received in cash.
Collected on accounts receivable, $22,300.
Issued shares of common stock in exchange for $8,000 in cash.
Paid salaries, $37,750 (of which $6,250 was for salaries payable at the end of the prior year).
Paid miscellaneous expense for various items, $20,400.
Purchased equipment for $10,500 in cash.
Paid $2,475 in cash dividends to shareholders.
Accrued salaries at year-end amounted to $755.
Depreciation for the year on the equipment is $1,600.
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.
5-a. Prepare an income statement for 2021.
5-b. Prepare a balance sheet as of December 31, 2021.
6. Prepare a post-closing trial balance.