In: Accounting
Brothers Harry and Herman Hausyerday began operations of their
machine shop (H & H Tool, Inc.)...
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 |
|
66 |
|
|
|
|
Accumulated Depreciation |
|
|
|
$ |
6 |
|
Software |
|
21 |
|
|
|
|
Accumulated Amortization |
|
|
|
|
6 |
|
Accounts Payable |
|
|
|
|
5 |
|
Notes Payable (short-term) |
|
|
|
|
0 |
|
Salaries and Wages Payable |
|
|
|
|
0 |
|
Interest Payable |
|
|
|
|
0 |
|
Income Tax Payable |
|
|
|
|
0 |
|
Common Stock |
|
|
|
|
82 |
|
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 |
$ |
107 |
|
$ |
107 |
|
|
Transactions and events during 2018 (summarized in thousands of
dollars) follow:
- Borrowed $12 cash on March 1 using a short-term note.
- Purchased land on March 2 for future building site; paid cash,
$9.
- Issued additional shares of common stock on April 3 for
$29.
- Purchased software on July 4, $10 cash.
- Purchased supplies on account on October 5 for future use,
$18.
- Paid accounts payable on November 6, $13.
- Signed a $25 service contract on November 7 to start February
1, 2019.
- Recorded revenues of $172 on December 8, including $46 on
credit and $126 collected in cash.
- Recognized salaries and wages expense on December 9, $91 paid
in cash.
- Collected accounts receivable on December 10, $30.
Data for adjusting journal entries as of December 31:
- Unrecorded amortization for the year on software, $6.
- Supplies counted on December 31, 2018, $10.
- Depreciation for the year on the equipment, $6.
- Interest of $1 to accrue on notes payable.
- Salaries and wages earned but not yet paid or recorded,
$12.
- Income tax for the year was $8. It will be paid in 2019.