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The general ledger of the Karlin Company, a consulting company, at January 1, 2021, contained the...

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Accounting

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

   

Account TitleDebitsCredits
Cash28,700
Accounts receivable18,000
Equipment31,000
Accumulated depreciation9,300
Salaries payable10,000
Common stock49,000
Retained earnings9,400
Total77,70077,700

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

  1. Service revenue, $134,000, of which $40,200 was on account andthe balance was received in cash.
  2. Collected on accounts receivable, $26,800.
  3. Issued shares of common stock in exchange for $16,000 incash.
  4. Paid salaries, $49,000 (of which $10,000 was for salariespayable at the end of the prior year).
  5. Paid miscellaneous expense for various items, $26,400.
  6. Purchased equipment for $18,500 in cash.
  7. Paid $3,250 in cash dividends to shareholders.
  1. Accrued salaries at year-end amounted to $980.
  2. Depreciation for the year on the equipment is $3,100.


Required:
a. Prepare an income statement for 2021.
b. Prepare a balance sheet as of December 31,2021.

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