Problem 2–6 (continued)
INCOME STATEMENT ACCOUNTS
Service revenue Miscellaneous expenses
_____________________________________________________________________________ _____________________________________________________________________________
0 1/1 Bal.
0
Salaries expense
_____________________________________________________________________________
1/1 Bal. 0
_______
Requirement 4
Account Title Debits Credits
Cash 45,800
Accounts receivable 17,700
Equipment 35,000
Accumulated depreciation 6,000
Problem 2–6 (continued)
Requirement 5
Salaries expense…………………………………………………….. 1,000
Depreciation expense……………………………………………… 2,000
Problem 2–6 (continued)
BALANCE SHEET ACCOUNTS
Cash Accounts receivable
________________________________________________________________ ________________________________________________________________
1/1 Bal. 30,000
1/1 Bal.
a. 70,000
b. 27,300
12/31 Bal.
Equipment
_____________________________
1/1 Bal. 20,000
Accumulated depreciation Salaries payable
_____________________________ _____________________________
6,000 1/1 Bal. 9,000
Common stock Retained earnings
_____________________________ _____________________________
_______
Problem 2–6 (continued)
INCOME STATEMENT ACCOUNTS
Service revenue Miscellaneous expenses
________________________________________________________________ ________________________________________________________________
0 1/1 Bal.
0
Depreciation expense
________________________________________________________
1/1 Bal. 0
Salaries expense
________________________________________________________
1/1 Bal. 0
Problem 2–6 (continued)
Requirement 6
Account Title Debits Credits
Cash 45,800
Accounts receivable 17,700
Equipment 35,000
Requirement 7
KARLIN COMPANY
Income Statement
For the Year Ended December 31, 2018
Service revenue ……………………………………. $100,000
Operating expenses:
Problem 2–6 (continued)
KARLIN COMPANY
Balance Sheet
At December 31, 2018
Assets
Current assets:
Cash …………………………………………………… $45,800
Property and equipment:
Liabilities and Shareholders’ Equity
Current liabilities:
Shareholders’ equity:
Common stock …………………………………….. $50,500
*Beginning balance of $9,500 plus net income of $32,000 less dividends of $2,500.
Problem 2–6 (continued)
Requirement 8
December 31, 2018
Service revenue……………………………………………………… 100,000
……………………………………………………Income summary
Problem 2–6 (continued)
BALANCE SHEET ACCOUNTS
Cash Accounts receivable
________________________________________________________ ________________________________________________________
1/1 Bal. 30,000
1/1 Bal.
a. 70,000
50,000
f.
_______
12/31 Bal.
Equipment
_______________________________________________________________________________________________
1/1 Bal. 20,000
_______
Accumulated depreciation Salaries payable
________________________________________________________________ ________________________________________________________________
6,000 1/1 Bal. 9,000
1/1 Bal.
8,00012/31 Bal. 1,00012/31 Bal.
Common stock Retained earnings
_____________________________________________________________________________ _____________________________________________________________________________
40,5001/1 Bal. 9,500
Problem 2–6 (continued)
INCOME STATEMENT ACCOUNTS
Service revenue Miscellaneous expenses
________________________________________________________________ ________________________________________________________________
0 1/1 Bal.
0
0
Depreciation expense
________________________________________________________________
1/1 Bal. 0
_______
12/31 Bal. 0
Salaries expense Income summary
________________________________________________________ ________________________________________________________
1/1 Bal. 0 100,000
Adjusting 1,000
_______
12/31 Bal. 012/31 Bal. 0
Problem 2–6 (concluded)
Requirement 9
Account Title Debits Credits
Cash 45,800
Accounts receivable 17,700
Equipment 35,000
Problem 2–7
Requirement 1
a. Interest receivable …………………………………………….. 600
Interest revenue ($10,000 x 12% x 1/2)…………………. 600
b. Depreciation expense ($30,000 x 1/5)……………………… 6,000
Accumulated depreciation………………………………. 6,000