Question

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		61
Accumulated Depreciation				$	5
Software		15
Accumulated Amortization					6
Accounts Payable					4
Notes Payable (short-term)					0
Salaries and Wages Payable					0
Interest Payable					0
Income Tax Payable					0
Common Stock					73
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	$	97		$	97
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, $162, including $41 on credit and $121 collected in cash. 4. Issued additional shares of stock for $4. 5. Recognized salaries and wages expense for 2015, $86 paid in cash. 6. Collected accounts receivable, $25. 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, $6. 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. 2. Record journal entries for transactions (1) through (10). (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.) 3, 5 and 8. Set up T-accounts for the accounts on the trial balance. Enter beginning balances and post the transactions 1-10, adjusting entries 11-16, and closing entry. (Enter your answers in thousands of dollars.) 3. Post the journal entries from requirement 2 to T-accounts and prepare an unadjusted trial balance. (Enter your answers in thousands of dollars.) H & H TOOL, INC. Unadjusted Trial Balance (in thousands) Account Titles Debit Credit Cash Accounts Receivable Supplies Land Equipment Accumulated Depreciation Software Accumulated Amortization Accounts Payable Notes Payable (short–term) Salaries and Wages Payable Interest Payable Income Taxes Payable Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Supplies Expense Depreciation Expense Interest Expense Income Tax Expense Totals 4. Record the adjusting journal entries (11) through (16) 5. Post the adjusting entries from requirement 4 and prepare an adjusted trial balance 6.a Prepare an income statement. 6.b Prepare a statement of retained earnings. 6.c Prepare balance sheet. (Amounts to be deducted should be indicated by a minus sign.) 7. Prepare the closing journal entry 8. Post the closing entry from requirement 7 and prepare a post-closing trial balance H & H TOOL, INC. Post-Closing Trial Balance (in thousands) Account Titles Debit Credit Cash Accounts Receivable Supplies Land Equipment Accumulated Depreciation Software Accumulated Amortization Accounts Payable Notes Payable (short–term) Salaries and Wages Payable Interest Payable Income Tax Payable Common Stock Retained Earnings Dividends Service Revenue Salaries and Wages Expense Supplies Expense Depreciation Expense Amortization Expense Interest Expense Income Tax Expense Totals

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	41.00
	Cash	121.00
	Service Revenue		162.00
4	Cash	4.00
	Common Stock		4.00
5	Salaries & Wages Expense	86.00
	Cash		86.00
6	Cash	25.00
	Accounts Payable		25.00
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	6.00
	Accumulated Amortization		6.00
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	138.00
	Salaries & Wages Expense		99.00
	Depreciation Expense		5.00
	Amortization Expense		6.00
	Income Tax Expense		7.00
	Interest Expense		1.00
	Supplies Expense		20.00
18	Service Revenue	162.00
	Income Summary		162.00
19	Income Summary	24.00
	Retained Earnings		24.00

Answer 3,5 & 8.
Cash					Accounts Receivable					Supplies
Beg. Bal.	2.00	8.00	2		Beg. Bal.	6.00	25.00	6		Beg. Bal.	13.00	20.00	12
1	11.00	86.00	5		3	41.00				9	19.00
3	121.00	11.00	7
4	4.00	12.00	8
6	25.00
End. Bal.	46.00				End. Bal.	22.00				End. Bal.	12.00
Land					Equipment					Accumulated Depreciation
Beg. Bal.	-				Beg. Bal.	61.00				Beg. Bal.		5.00
2	8.00											5.00	13
End. Bal.	8.00				End. Bal.	61.00				End. Bal.		10.00
Software					Accumulated Amortization					Accounts Payable
Beg. Bal.	15.00				Beg. Bal.		6.00			Beg. Bal.		4.00
7	11.00						6.00	11		8	12.00	19.00	9
End. Bal.	26.00				End. Bal.		12.00			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.		73.00			Beg. Bal.		9.00
		7.00	16				4.00	4
End. Bal.		7.00			End. Bal.		77.00			End. Bal.		9.00
												24.00	19
										Cls. Bal.		33.00
Service Revenue					Salaries & Wages Expense					Depreciation Expense
Beg. Bal.		-			Beg. Bal.	-				Beg. Bal.	-
		162.00	3		5	86.00				13	5.00
					15	13.00
End. Bal.		162.00			End. Bal.	99.00				End. Bal.	5.00
18	162.00						99.00	17				5.00	17
Cls. Bal.	-				Cls. Bal.	-				Cls. Bal.	-
Amortization Expense					Income Tax Expense					Interest Expense
Beg. Bal.	-				Beg. Bal.	-				Beg. Bal.	-
11	6.00				16	7.00				14	1.00
End. Bal.	6.00				End. Bal.	7.00				End. Bal.	1.00
		6.00	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 2.
H & H Tools Inc
Unajusted Trial Balance
For the Year Ended Dec 31-2015
Accounts Title	Debits	Credits
Cash	46.00
Accounts Receivable	22.00
Supplies	32.00
Land	8.00
Equipment	61.00
Accumulated Depreciation		5.00
Software	26.00
Accumulated Amortization		6.00
Accounts Payable		11.00
Notes Payable (Short Term)		11.00
Salaries & Wages Payable		-
Interest Payable		-
Income Tax Payable		-
Common Stock		77.00
Retained Earnings		9.00
Service Revenue		162.00
Salaries & Wages Expense	86.00
Depreciation Expense	-
Amortization Expense	-
Income Tax Expense	-
Interest Expense	-
Supplies Expense	-
Total	281.00	281.00

Answer 3.
H & H Tools Inc
Adjusted Trial Balance
For the Year Ended Dec 31-2015
Accounts Title	Debits	Credits
Cash	46.00
Accounts Receivable	22.00
Supplies	12.00
Land	8.00
Equipment	61.00
Accumulated Depreciation		10.00
Software	26.00
Accumulated Amortization		12.00
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		77.00
Retained Earnings		9.00
Service Revenue		162.00
Salaries & Wages Expense	99.00
Depreciation Expense	5.00
Amortization Expense	6.00
Income Tax Expense	7.00
Interest Expense	1.00
Supplies Expense	20.00
Total	313.00	313.00