In: Accounting
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 | 68 | |||||
Accumulated Depreciation | $ | 7 | ||||
Software | 24 | |||||
Accumulated Amortization | 8 | |||||
Accounts Payable | 6 | |||||
Notes Payable (short-term) | 0 | |||||
Salaries and Wages Payable | 0 | |||||
Interest Payable | 0 | |||||
Income Tax Payable | 0 | |||||
Common Stock | 83 | |||||
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 | $ | 111 | $ | 111 | ||
Transactions and events during 2018 (summarized in thousands of dollars) follow:
Data for adjusting journal entries as of December 31:
6-a. Prepare an income statement.
6-b. Prepare the statement of retained earnings.
6-c. Prepare the balance sheet.
6-d. Prepare the closing journal entry.
6-e. Post the closing entry from requirement 7 and prepare a post-closing trial balance.
6-f. How much net income did H & H Tool, Inc., generate during 2018? What was its net profit margin?
6-g. Is the company financed primarily by liabilities or stockholders’ equity?
6-h. What is its current ratio?
Income statement, Balance sheet, Statement of changes in equity and post closing Trial balance are prepared based on adjusted trial balance for the year ended December 31, 2018.
The adjusted trial balance on the same period is enclosed,