Prepare an income statement, balance sheet, and post closing trial balance The g
ID: 2330701 • Letter: P
Question
Prepare an income statement, balance sheet, and post closing trial balance
The general ledger of the Karlin Company, a consulting company, at January 1, 2018, contained the following account balances Account Title Cash Accounts receivable Equipment Accumulated depreciation Salaries payable Common stock Retained earnings Total Debits Credits 29,600 16,500 28,000 8,400 9,250 47,500 8,950 74,100 74,100 The following is a summary of the transactions for the year: a. Sales of services, $128,000, of which $38,400 was on credit. b. Collected on accounts receivable, $25,900 c. Issued shares of common stock in exchange for $14,500 in cash d. Paid salaries, $46,750 (of which $9,250 was for salaries payable) e. Paid miscellaneous expenses, $25,200 f. Purchased equipment for $17,000 in cash g. Paid $3,100 in cash dividends to shareholders 1. Accrued salaries at year-end amounted to $935 2. Depreciation for the year on the equipment is $2,800Explanation / Answer
Accounting Equation
Retained earnings
Cash
Accounts Receivable
equipment
Accumulated Depreciation
Salaries Payable
Common Stock
Revenue
Expenses
Net Retained earnings
Beginning Balances
$ 29,600.00
$ 16,500.00
$ 28,000.00
$ 8,400.00
$ 9,250.00
$ 47,500.00
$ 8,950.00
a
$ 89,600.00
$ 38,400.00
$ 128,000.00
$ 128,000.00
b
$ 25,900.00
$ (25,900.00)
$ -
c
$ 14,500.00
$ 14,500.00
$ -
d
$ (46,750.00)
$ (9,250.00)
$ 37,500.00
$ (37,500.00)
e
$ (25,200.00)
$ 25,200.00
$ (25,200.00)
f
$ (17,000.00)
$ 17,000.00
$ -
g
$ (3,100.00)
$ (3,100.00)*
$ 1.00
$ 935.00
$ 935.00
$ (935.00)
$ 2.00
$ 2,800.00
$ 2,800.00
$ (2,800.00)
Ending Balance
$ 67,550.00
$ 29,000.00
$ 45,000.00
$ 11,200.00
$ 935.00
$ 62,000.00
$ 67,415.00
*Dividend is deducted from Retained earnings
Karlin Company
Income Statement
For the Year ended December 31, 2018
Service Revenue
$ 128,000.00
Operating Expenses
Salaries Expense
$ 38,435.00
Miscellaneous Expense
$ 25,200.00
depreciation Expense
$ 2,800.00
Total Operating Expenses
$ 66,435.00
Net Income
$ 61,565.00
Karlin Company
Balance Sheet
31-Dec-18
Assets
Current Assets
Cash
$ 67,550.00
Accounts Receivables
$ 29,000.00
Total Current Assets
$ 96,550.00
Property and Equipment
Equipment
$ 45,000.00
Accumulated depreciation
$ (11,200.00)
$ 33,800.00
Total Assets
$ 130,350.00
Liabilities and Shareholder's Equity
Current Liabilities
Salaries payable
$ 935.00
Total Current liabilities
$ 935.00
Shareholder's equity
Common Stock
$ 62,000.00
Retained Earnings
$ 67,415.00
Total Shareholder's Equity
$ 129,415.00
Total Liabilities and Shareholder's Equity
$ 130,350.00
Karlin Company
Post -Closing Trial Balance
Account Title
Debits
Credits
Cash
$ 67,550.00
Accounts Receivable
$ 29,000.00
Equipment
$ 45,000.00
Accumulated depreciation
$ 11,200.00
Salaries Payable
$ 935.00
Common Stock
$ 62,000.00
Retained Earnings
$ 8,950.00
Service Revenue
$ 128,000.00
Salaries Expense
$ 38,435.00*
Miscellaneous Expense
$ 25,200.00
Depreciation Expense
$ 2,800.00
Dividends
$ 3,100.00
Total
$ 211,085.00
$ 211,085.00
*$ 37500+$ 935
Accounting Equation
Retained earnings
Cash
Accounts Receivable
equipment
Accumulated Depreciation
Salaries Payable
Common Stock
Revenue
Expenses
Net Retained earnings
Beginning Balances
$ 29,600.00
$ 16,500.00
$ 28,000.00
$ 8,400.00
$ 9,250.00
$ 47,500.00
$ 8,950.00
a
$ 89,600.00
$ 38,400.00
$ 128,000.00
$ 128,000.00
b
$ 25,900.00
$ (25,900.00)
$ -
c
$ 14,500.00
$ 14,500.00
$ -
d
$ (46,750.00)
$ (9,250.00)
$ 37,500.00
$ (37,500.00)
e
$ (25,200.00)
$ 25,200.00
$ (25,200.00)
f
$ (17,000.00)
$ 17,000.00
$ -
g
$ (3,100.00)
$ (3,100.00)*
$ 1.00
$ 935.00
$ 935.00
$ (935.00)
$ 2.00
$ 2,800.00
$ 2,800.00
$ (2,800.00)
Ending Balance
$ 67,550.00
$ 29,000.00
$ 45,000.00
$ 11,200.00
$ 935.00
$ 62,000.00
$ 67,415.00