Question

Problem 2-6 (Algo) Accounting cycle [LO2-3, 2-4, 2-5, 2-6, 2-7, 2-8]

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

   

Account Title	Debits		Credits
Cash	28,100
Accounts receivable	19,000
Equipment	33,000
Accumulated depreciation			9,900
Salaries payable			10,500
Common stock			50,000
Retained earnings			9,700
Total	80,100		80,100

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

1. Service revenue, $138,000, of which $41,400 was on account and the balance was received in cash.
2. Collected on accounts receivable, $27,400.
3. Issued shares of common stock in exchange for $17,000 in cash.
4. Paid salaries, $50,500 (of which $10,500 was for salaries payable at the end of the prior year).
5. Paid miscellaneous expense for various items, $27,200.
6. Purchased equipment for $19,500 in cash.
7. Paid $3,350 in cash dividends to shareholders.

1. Accrued salaries at year-end amounted to $1,010.
2. Depreciation for the year on the equipment is $3,300.

Required:

2., 5, & 8. Prepare the summary, adjusting and closing entries for each of the transactions listed.
3. Post the transactions, adjusting and closing entries into the appropriate t-accounts.
4. Prepare an unadjusted trial balance.
6. Prepare an adjusted trial balance.
7-a. Prepare an income statement for 2021.
7-b. Prepare a balance sheet as of December 31, 2021.
9. Prepare a post-closing trial balance.

I have everything correct except number 9. Would someone be able to tell me what's wrong here? It says everything is correct EXCEPT for the revenue and expense accounts

Prepare a post-closing trial balance. Credits $ KARLIN COMPANY Post-Closing Trial Balance Account Title Debits Cash $ 68,550 Accounts receivable 33,000 Equipment 52,500 Accumulated depreciation Salaries payable Common stock Retained earnings Service revenue Salaries expense 0 Miscellaneous expenses Depreciation expense Totals $ 154,050 13,200 1,010 67,000 72,840 $ 154,050

Answer 1

Journal entries

Account	debit	credit
Account Recievable	41,400
Cash	96,600
Service Revenue		138,000
Cash	27,400
Account Recievable		27,400
Cash	17,000
Common stock		17,000
Salaries payable	10,500
Salaries expenses	40,000
Cash		50,500
Misc expenses	27,200
Cash		27,200
Equipment	19,500
Cash		19,500
Dividends	3,350
Cash		3,350

T accounts

Cash

Bal	28,100	4.	50,500
1.	96,600	5.	27,200
2.	27,400	6	19,500
3.	17,000	7	3,350
Bal	68,550

Account Recievable

Bal	19,000	2.	27,400
1.	41,400
Bal	33,000

Equipment

Bal	33,000
6	19,500
Bal	52,500

Salaries payable

4

10,500

Bal

10,500

Common stock

		Bal	50,000
		3	17000
		Bal	67,000

Salaries expenses

4

40,000

Misc expenses

5

27,200

Dividends

7

3350

Unadjusted trail balance

Accounts	debit	credit
Cash	68,550
Account Recievable	33,000
Equipment	52,500
Common stock		67,000
Retained earnings		9,700
Accumulated depreciation		9,900
Salaries expenses	40,000
Misc expenses	27,200
Dividends	3,350
Service Revenue		138,000
Total	224,600	224,600

Adjusting entries

1.	Salaries expenses	1,010
	Salaries payable		1,010
2.	Depreciation expense	3,300
	Accumulated depreciation		3,300

T account

Salaries expenses

Bal	40,000
1.	1,010
Bal	41,010

Salaries payable

1

1,010

Depreciation expense

2	3,300

Accumulated depreciation

		Bal	9,900
		2	3,300
		Bal	13,200

Adjusted Trail balance

Accounts	debit	credit
Cash	68,550
Account Recievable	33,000
Equipment	52,500
Common stock		67,000
Retained earnings		9,700
Accumulated depreciation		13,200
Salaries payable		1,010
Salaries expenses	41,010
Misc expenses	27,200
Depreciation expense	3,300
Dividends	3,350
Service Revenue		138,000
Total	228,910	228,910

Income statement

Service revenue		138,000
Expenses
Salaries expenses	41,010
Misc expenses	27,200
Depreciation expense	3,300
Total expenses		71,510
Net income		66,490

Retained earnings statement

Openings balance	9,700
Income	66,490
Dividends	(3350)
Closing balance	72,840

Balance sheet

Assets			Equity and liabilities
Cash		68,550	salaries payable	1,010
Account Recievable		33,000	stockholders equity
Equipment	52,500		Common stock	67,000
Less: Accumulated depreciation	13,200	39,300	retained earnings	72,840
Total		140,850		140,850

Closing journal entries

Service Revenue	138,000
Income Summary		138,000
Income Summary	71,510
Salaries expenses		41,010
Misc expenses		27,200
Depreciation expense		3,300
Income Summary	66,490
Retained earnings		66,490
Retained earnings	3350
Dividends		3350

Post closing trail balance

Accounts	debit	credit
Cash	68,550
Account Recievable	33,000
Equipment	52,500
Accumulated depreciation		13,200
Salaries payable		1,010
Common stock		67,000
Retained earnings		72,840
Total	154,050	154,050