Question

From Recording Transactions (Including Adjusting Journal Entries) to Preparing Financial Statements and Closing Journal Entries (Chapters 2, 3, and 4) [LO 2-3, LO 3-3, LO 4-1, LO 4-2, LO 4-3, LO 4-4, LO 4-5, LO 4-6]

[The following information applies to the questions displayed below.]

Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2013. The annual reporting period ends December 31. The trial balance on January 1, 2015, follows (the amounts are rounded to thousands of dollars to simplify):

Account Titles	Debit			Credit
Cash	$	2
Accounts Receivable		6
Supplies		13
Land		0
Equipment		67
Accumulated Depreciation				$	5
Software		21
Accumulated Amortization					7
Accounts Payable					4
Notes Payable (short-term)					0
Salaries and Wages Payable					0
Interest Payable					0
Income Tax Payable					0
Common Stock					84
Retained Earnings					9
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	$	109		$	109

Transactions during 2015 (summarized in thousands of dollars) follow:
1.	Borrowed $11 cash on a six-month note payable dated March 1, 2015.
2.	Purchased land for future building site; paid cash, $8.
3.	Earned revenues for 2015, $174, including $47 on credit and $127 collected in cash.
4.	Issued additional shares of stock for $4.
5.	Recognized salaries and wages expense for 2015, $92 paid in cash.
6.	Collected accounts receivable, $31.
7.	Purchased software, $11 cash.
8.	Paid accounts payable, $12.
9.	Purchased supplies on account for future use, $19.
10.	Signed a $20 service contract to start February 1, 2016.
Data for adjusting journal entries:
11.	Unrecorded amortization for the year on software, $7.
12.	Supplies counted on December 31, 2015, $12.
13.	Depreciation for the year on the equipment, $5.
14.	Accrued interest of $1 on notes payable.
15.	Salaries and wages earned but not yet paid or recorded, $13.
16.	Income tax for the year was $7. It will be paid in 2016.

INCLUDE journal entires, adjusting journal entires, T-accounts,unadjusted trial balance, adjusted trial balance,income statement, statement of retained earnings, closing journal entry, post-closing trial balance

Answer 1

Answer 1, 4 , 7
Journal Entry
Date	Particulars	Dr. Amt.	Cr. Amt.
1	Cash	11.00
	Notes Payable - Short Term		11.00
2	Land	8.00
	Cash		8.00
3	Accounts Receivable	47.00
	Cash	127.00
	Service Revenue		174.00
4	Cash	4.00
	Common Stock		4.00
5	Salaries & Wages Expense	92.00
	Cash		92.00
6	Cash	31.00
	Accounts Payable		31.00
7	Software	11.00
	Cash		11.00
8	Accounts Payable	12.00
	Cash		12.00
9	Supplies	19.00
	Accounts Payable		19.00
10	No Entry
Adjusting Entry
11	Amortization Expense	7.00
	Accumulated Amortization		7.00
12	Supplies Expense	20.00
	Supplies		20.00
13	Depreciation Expense	5.00
	Accumulated Depreciation		5.00
14	Interest Expense	1.00
	Interest Payable		1.00
15	Salaries & Wages Expense	13.00
	Salaries & Wages Payable		13.00
16	Income Tax Expense	7.00
	Income Tax Payable		7.00
Closing Entry
17	Income Summary	145.00
	Salaries & Wages Expense		105.00
	Depreciation Expense		5.00
	Amortization Expense		7.00
	Income Tax Expense		7.00
	Interest Expense		1.00
	Supplies Expense		20.00
18	Service Revenue	174.00
	Income Summary		174.00
19	Income Summary	29.00
	Retained Earnings		29.00

Answer 3,5 & 8.
Cash					Accounts Receivable					Supplies
Beg. Bal.	2.00	8.00	2		Beg. Bal.	6.00	31.00	6		Beg. Bal.	13.00	20.00	12
1	11.00	92.00	5		3	47.00				9	19.00
3	127.00	11.00	7
4	4.00	12.00	8
6	31.00
End. Bal.	52.00				End. Bal.	22.00				End. Bal.	12.00
Land					Equipment					Accumulated Depreciation
Beg. Bal.	-				Beg. Bal.	67.00				Beg. Bal.		5.00
2	8.00											5.00	13
End. Bal.	8.00				End. Bal.	67.00				End. Bal.		10.00
Software					Accumulated Amortization					Accounts Payable
Beg. Bal.	21.00				Beg. Bal.		7.00			Beg. Bal.		4.00
7	11.00						7.00	11		8	12.00	19.00	9
End. Bal.	32.00				End. Bal.		14.00			End. Bal.		11.00
Notes Payable (Short Term)					Salaries & Wages Payable					Interest Payable
Beg. Bal.		-			Beg. Bal.	-				Beg. Bal.		-
		11.00	1				13.00	15				1.00	14
End. Bal.		11.00			End. Bal.		13.00			End. Bal.		1.00
Income Tax Payable					Common Stock					Retained Earnings
Beg. Bal.		-			Beg. Bal.		84.00			Beg. Bal.		9.00
		7.00	16				4.00	4
End. Bal.		7.00			End. Bal.		88.00			End. Bal.		9.00
												29.00	19
										Cls. Bal.		38.00
Service Revenue					Salaries & Wages Expense					Depreciation Expense
Beg. Bal.		-			Beg. Bal.	-				Beg. Bal.	-
		174.00	3		5	92.00				13	5.00
					15	13.00
End. Bal.		174.00			End. Bal.	105.00				End. Bal.	5.00
18	174.00						105.00	17				5.00	17
Cls. Bal.	-				Cls. Bal.	-				Cls. Bal.	-
Amortization Expense					Income Tax Expense					Interest Expense
Beg. Bal.	-				Beg. Bal.	-				Beg. Bal.	-
11	7.00				16	7.00				14	1.00
End. Bal.	7.00				End. Bal.	7.00				End. Bal.	1.00
		7.00	17				7.00	17				1.00	17
Cls. Bal.	-				Cls. Bal.	-				Cls. Bal.	-
Supplies Expense
Beg. Bal.	-
12	20.00
End. Bal.	20.00
		20.00	17
Cls. Bal.	-

Answer 3.
H & H Tools Inc
Adjusted Trial Balance
For the Year Ended Dec 31-2015
Accounts Title	Debits	Credits
Cash	52.00
Accounts Receivable	22.00
Supplies	12.00
Land	8.00
Equipment	67.00
Accumulated Depreciation		10.00
Software	32.00
Accumulated Amortization		14.00
Accounts Payable		11.00
Notes Payable (Short Term)		11.00
Salaries & Wages Payable		13.00
Interest Payable		1.00
Income Tax Payable		7.00
Common Stock		88.00
Retained Earnings		9.00
Service Revenue		174.00
Salaries & Wages Expense	105.00
Depreciation Expense	5.00
Amortization Expense	7.00
Income Tax Expense	7.00
Interest Expense	1.00
Supplies Expense	20.00
Total	338.00	338.00
		-
Answer 2.
H & H Tools Inc
Unajusted Trial Balance
For the Year Ended Dec 31-2015
Accounts Title	Debits	Credits
Cash	52.00
Accounts Receivable	22.00
Supplies	32.00
Land	8.00
Equipment	67.00
Accumulated Depreciation		5.00
Software	32.00	-
Accumulated Amortization		7.00
Accounts Payable		11.00
Notes Payable (Short Term)		11.00
Salaries & Wages Payable		-
Interest Payable		-
Income Tax Payable		-
Common Stock		88.00
Retained Earnings		9.00
Service Revenue		174.00
Salaries & Wages Expense	92.00
Depreciation Expense	-
Amortization Expense	-
Income Tax Expense	-
Interest Expense	-
Supplies Expense	-
Total	305.00	305.00
		-
Answer 6-a.
H & H Tools Inc
Income Statement
For the Year Ended Dec 31-2015
Revenue:
Service Revenue		174.00
Expense:
Salaries & Wages Expense	105.00
Depreciation Expense	5.00
Amortization Expense	7.00
Interest Expense	1.00
Supplies Expense	20.00	138.00
Net Income Before Tax		36.00
Income Tax Expense		7.00
Net Income		29.00
Answer 6-b.
H & H Tools Inc
Statement Of Retained Earnings
For the Year Ended Dec 31-2015
Beginning Balance		9.00
Net Income		29.00
Ending Balance		38.00
Answer 6-c.
H & H Tools Inc
Balance Sheet
Dec 31-2015
Assets
Current assets
Cash		52.00
Accounts Receivable		22.00
Supplies		12.00	86.00
Property, Plant & Equipment
Land		8.00
Equipment	67.00
Accumulated Depreciation	(10.00)	57.00
Software	32.00
Accumulated Amortization	(14.00)	18.00	83.00
Total Assets			169.00
Liabilities & Stockholders' Equity
Liabilities
Current Liabilities
Accounts Payable		11.00
Notes Payable (Short Term)		11.00
Salaries & Wages Payable		13.00
Interest Payable		1.00
Income Tax Payable		7.00	43.00
Other Liabilities			-
Total Liabilities			43.00
Stockholders' Equity
Common Stock		88.00
Retained Earnings		38.00
Total Stockholders' Equity			126.00
Total Liabilities & Stockholders' Equity			169.00