Accounting Cycle: Problem 1 Open the attached file and follow the steps. You must do this assignment in Excel. Ideally, you should have separate tabs for each step that you complete. Please refer to Chapter 2 and reach out if you have questions. The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the following account balances: Account Title Debits Credits Cash 33,500 Accounts receivable 10,000 Equipment 15,000 Accumulated depreciation 4,500 Salaries payable 6,000 Common stock 41,000 Retained earnings 7,000 Total 58,500 58,500 ________________________________________ The following is a summary of the transactions for the year: a. Service revenue, $102,000, of which $30,600 was on account and the balance was received in cash. b. Collected on accounts receivable, $22,000. c. Issued shares of common stock in exchange for $7,500 in cash. d. Paid salaries, $37,000 (of which $6,000 was for salaries payable at the end of the prior year). e. Paid miscellaneous expense for various items, $20,000. f. Purchased equipment for $10,000 in cash. g. Paid $2,425 in cash dividends to shareholders. 1. Accrued salaries at year-end amounted to $740. 2. Depreciation for the year on the equipment is $1,500. Required: Follow the accounting processing cycle and work through the following items: 1. Record the above transactions in the journal. (Hint: This is where you create your journal entries.) 2. Prepare an unadjusted trial balance and enter the unadjusted balances into T-accounts. 3. Prepare and post the adjusting entries to the appropriate T-accounts. 4. Prepare an adjusted trial balance. 5. Prepare an income statement for 2021. 6. Prepare a balance sheet as of December 31, 2021. 7. Prepare a statement of shareholders’ equity as of December 31, 2021 8. Prepare and post the closing entries. 9. Prepare a post-closing trial balance.
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