Question

Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (the amounts are rounded to thousands of dollars to simplify):

Account Titles	Debit			Credit
Cash	$	4
Accounts Receivable		4
Supplies		11
Land		0
Equipment		50
Accumulated Depreciation				$	7
Software		23
Accumulated Amortization					5
Accounts Payable					6
Notes Payable (short-term)					0
Salaries and Wages Payable					0
Interest Payable					0
Income Tax Payable					0
Common Stock					67
Retained Earnings					7
Service Revenue		0
Salaries and Wages Expense		0
Depreciation Expense		0
Amortization Expense		0
Income Tax Expense		0
Interest Expense		0
Supplies Expense		0
Totals	$	92		$	92

Transactions and events during 2018 (summarized in thousands of dollars) follow:

1. Borrowed $13 cash on March 1 using a short-term note.
2. Purchased land on March 2 for future building site; paid cash, $7.
3. Issued additional shares of common stock on April 3 for $34.
4. Purchased software on July 4, $12 cash.
5. Purchased supplies on account on October 5 for future use, $17.
6. Paid accounts payable on November 6, $14.
7. Signed a $30 service contract on November 7 to start February 1, 2019.
8. Recorded revenues of $140 on December 8, including $30 on credit and $110 collected in cash.
9. Recognized salaries and wages expense on December 9, $75 paid in cash.
10. Collected accounts receivable on December 10, $14.

Data for adjusting journal entries as of December 31:

11. Unrecorded amortization for the year on software, $5.
12. Supplies counted on December 31, 2018, $11.
13. Depreciation for the year on the equipment, $7.
14. Interest of $2 to accrue on notes payable.
15. Salaries and wages earned but not yet paid or recorded, $13.
16. Income tax for the year was $9. It will be paid in 2019.

7. Prepare the closing journal entry. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.)

Answer 1

ANSWER :-

H & H Tool Inc

Entry to close revenue and expenses account to retained earnings:

Date	Account Titles and Explanation	Ref. No.	Debit	Credit
31-Dec-18	Revenues		$140
	Income Summary			$140
	(To close revenues account to income summary)
31-Dec	Income Summary		$138
	supplies expense	$15
	Salaries and Wages Expense	$86
	Amortization expense - software	$5
	Depreciation expense - equipment	$7
	interest expense	$2
	income tax expense	$9
	(To close expenses accounts to income summary)
31-Dec-18	Income Summary	$14
	Retained Earnings		$14
	(To transfer net income to retained earnings)

Computations:

Income Statement:

H&Htool
Income Statement
For the year Ended December 31, 2018
Revenues		$140
Expenses:
Supplies expense	$15
Salaries and Wages Expense``````````````````````````````````	$86
Amortization expense - software	$5
Depreciation expense - equipment	$7
i nterest expense	$2
income tax expense	$9
Total expenses		$138
net operating income		$14

Notes:

1. Salaries expense –

Paid $75

Unpaid $11

Total salaries and wages expense - $86

1. Supplies expense –

Cost of supplies used = Beg. Balance + purchases – ending balance

Supplies expense = $11 + $17 - $13 = $15

______________________________________________

if you have any query please ask me in comment box i am here to helps you don't give direct Thumbs down.if you satisfied my work give Thumbs UP

*******THANK YOU*******