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	$	3
Accounts Receivable		5
Supplies		12
Land		0
Equipment		69
Accumulated Depreciation				$	6
Software		24
Accumulated Amortization					4
Accounts Payable					5
Notes Payable (short-term)					0
Salaries and Wages Payable					0
Interest Payable					0
Income Tax Payable					0
Common Stock					90
Retained Earnings					8
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	$	113		$	113

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

1. Borrowed $12 cash on March 1 using a short-term note.
2. Purchased land on March 2 for future building site; paid cash, $9.
3. Issued additional shares of common stock on April 3 for $23.
4. Purchased software on July 4, $10 cash.
5. Purchased supplies on account on October 5 for future use, $18.
6. Paid accounts payable on November 6, $13.
7. Signed a $25 service contract on November 7 to start February 1, 2019.
8. Recorded revenues of $178 on December 8, including $49 on credit and $129 collected in cash.
9. Recognized salaries and wages expense on December 9, $94 paid in cash.
10. Collected accounts receivable on December 10, $33.

Data for adjusting journal entries as of December 31:

11. Unrecorded amortization for the year on software, $4.
12. Supplies counted on December 31, 2018, $10.
13. Depreciation for the year on the equipment, $6.
14. Interest of $1 to accrue on notes payable.
15. Salaries and wages earned but not yet paid or recorded, $12.
16. Income tax for the year was $8. It will be paid in 2019.

3. Prepare an unadjusted trial balance. (Enter your answers in thousands of dollars.)

Answer 1

Computation for Unadjusted Trial Balance:

Unadjusted Balance = Opening Balance Adjustments during the year (All adjustments are made in the sequence provided in question)

	Unadjusted	Trial Balance
	Debit	Credit
Cash	=3+12-9+23-10-13+129-94+33
Accounts Receivable	=5+49-33
Supplies	=12+18
Land	=9
Equipment	=69
Accumulated Depreciation		=6
Software	=24+10
Accumulated Amortization		=4
Accounts Payable		=5+18-13
Notes Payable (short term)		=12
Salaries and Wages Payable		0
Interest Payable		0
Income Tax Payable		0
Common Stock		=90+23
Retained Earnings		=8
Service Revenue		178
Salaries and Wages Expense	=94
Depreciation Expense	0
Amortization Expense	0
Income Tax Expense	0
Interest Expense	0
Supplies Expense	0

Unadjusted Trial Balance figures along with year ending adjustments and Adjusted Trial Balance.

	Unadjusted	Trial Balance	Adjus	tments	Adjusted	Trial Bal
	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$                  74				$                  74
Accounts Receivable	$                  21				$                  21
Supplies	$                  30			$                  20	$                  10
Land	$                     9				$                     9
Equipment	$                  69				$                  69
Accumulated Depreciation		$                     6		$                     6		$                  12
Software	$                  34				$                  34
Accumulated Amortization		$                     4		$                     4		$                     8
Accounts Payable		$                  10				$                  10
Notes Payable (short term)		$                  12				$                  12
Salaries and Wages Payable		$                   -		$                  12		$                  12
Interest Payable		$                   -		$                     1		$                     1
Income Tax Payable		$                   -		$                     8		$                     8
Common Stock		$                113				$                113
Retained Earnings		$                     8				$                     8
Service Revenue		$                178				$                178
Salaries and Wages Expense	$                  94		$                  12		$                106
Depreciation Expense	$                   -		$                     6		$                     6
Amortization Expense	$                   -		$                     4		$                     4
Income Tax Expense	$                   -		$                     8		$                     8
Interest Expense	$                   -		$                     1		$                     1
Supplies Expense	$                   -		$                  20		$                  20
Totals	$                331	$                331	$                  51	$                  51	$                362	$                362

Note: If you still have any doubt, feel free to ask in comment section.