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	$	4
Accounts Receivable		4
Supplies		11
Land		0
Equipment		53
Accumulated Depreciation				$	7
Software		20
Accumulated Amortization					7
Accounts Payable					6
Notes Payable (short-term)					0
Salaries and Wages Payable					0
Interest Payable					0
Income Tax Payable					0
Common Stock					65
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	$	92		$	92

Transactions during 2015 (summarized in thousands of dollars) follow:
1.	Borrowed $13 cash on a six-month note payable dated March 1, 2015.
2.	Purchased land for future building site; paid cash, $7.
3.	Earned revenues for 2015, $146, including $33 on credit and $113 collected in cash.
4.	Issued additional shares of stock for $2.
5.	Recognized salaries and wages expense for 2015, $78 paid in cash.
6.	Collected accounts receivable, $17.
7.	Purchased software, $12 cash.
8.	Paid accounts payable, $14.
9.	Purchased supplies on account for future use, $17.
10.	Signed a $30 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, $11.
13.	Depreciation for the year on the equipment, $7.
14.	Accrued interest of $2 on notes payable.
15.	Salaries and wages earned but not yet paid or recorded, $13.
16.	Income tax for the year was $9. It will be paid in 2016.

1.) 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. What is the retained earnings T-account?

2.) Post the journal entries from requirement 2 to T-accounts and prepare an unadjusted trial balance.

Answer 1

Answer 1 & 2.
Cash					Accounts Receivable					Supplies
Beg. Bal.	4.00	7.00	2		Beg. Bal.	4.00	17.00	6		Beg. Bal.	11.00	17.00	12
1	13.00	78.00	5		3	33.00				9	17.00
3	113.00	12.00	7
4	2.00	14.00	8
6	17.00
End. Bal.	38.00				End. Bal.	20.00				End. Bal.	11.00
Land					Equipment					Accumulated Depreciation
Beg. Bal.	-				Beg. Bal.	53.00				Beg. Bal.		7.00
2	7.00											7.00	13
End. Bal.	7.00				End. Bal.	53.00				End. Bal.		14.00
Software					Accumulated Amortization					Accounts Payable
Beg. Bal.	20.00				Beg. Bal.		7.00			Beg. Bal.		6.00
7	12.00						7.00	11		8	14.00	17.00	9
End. Bal.	32.00				End. Bal.		14.00			End. Bal.		9.00
Notes Payable (Short Term)					Salaries & Wages Payable					Interest Payable
Beg. Bal.		-			Beg. Bal.	-				Beg. Bal.		-
		13.00	1				13.00	15				2.00	14
End. Bal.		13.00			End. Bal.		13.00			End. Bal.		2.00
Income Tax Payable					Common Stock					Retained Earnings
Beg. Bal.		-			Beg. Bal.		65.00			Beg. Bal.		7.00
		9.00	16				2.00	4				13.00	19
End. Bal.		9.00			End. Bal.		67.00			End. Bal.		20.00
Service Revenue					Salaries & Wages Expense					Depreciation Expense
Beg. Bal.		-			Beg. Bal.	-	91.00	17		Beg. Bal.	-	7.00	17
18	146.00	146.00	3		5	78.00				13	7.00
					15	13.00
End. Bal.		-			End. Bal.	-				End. Bal.	-
Amortization Expense					Income Tax Expense					Interest Expense
Beg. Bal.	-	7.00	17		Beg. Bal.	-	9.00	17		Beg. Bal.	-	2.00	17
11	7.00				16	9.00				14	2.00
End. Bal.	-				End. Bal.	-				End. Bal.	-
Supplies Expense
Beg. Bal.	-	17.00	17
12	17.00
End. Bal.	-

Answer 2.
H & H Tools Inc
Unajusted Trial Balance
For the Year Ended Dec 31-2015
Accounts Title	Debits	Credits
Cash	38.00
Accounts Receivable	20.00
Supplies	28.00
Land	7.00
Equipment	53.00
Accumulated Depreciation		7.00
Software	32.00
Accumulated Amortization		7.00
Accounts Payable		9.00
Notes Payable (Short Term)		13.00
Salaries & Wages Payable		-
Interest Payable		-
Income Tax Payable		-
Common Stock		67.00
Retained Earnings		7.00
Service Revenue		146.00
Salaries & Wages Expense	78.00
Depreciation Expense	-
Amortization Expense	-
Income Tax Expense	-
Interest Expense	-
Supplies Expense	-
Total	256.00	256.00

Journal Entry
Date	Particulars	Dr. Amt.	Cr. Amt.
1	Cash	13.00
	Notes Payable - Short Term		13.00
2	Land	7.00
	Cash		7.00
3	Accounts Receivable	33.00
	Cash	113.00
	Service Revenue		146.00
4	Cash	2.00
	Common Stock		2.00
5	Salaries & Wages Expense	78.00
	Cash		78.00
6	Cash	17.00
	Accounts Payable		17.00
7	Software	12.00
	Cash		12.00
8	Accounts Payable	14.00
	Cash		14.00
9	Supplies	17.00
	Accounts Payable		17.00
10	No Entry
Adjusting Entry
11	Amortization Expense	7.00
	Accumulated Amortization		7.00
12	Supplies Expense	17.00
	Supplies		17.00
13	Depreciation Expense	7.00
	Accumulated Depreciation		7.00
14	Interest Expense	2.00
	Interest Payable		2.00
15	Salaries & Wages Expense	13.00
	Salaries & Wages Payable		13.00
16	Income Tax Expense	9.00
	Income Tax Payable		9.00
Closing Entry
17	Income Summary	133.00
	Salaries & Wages Expense		91.00
	Depreciation Expense		7.00
	Amortization Expense		7.00
	Income Tax Expense		9.00
	Interest Expense		2.00
	Supplies Expense		17.00
18	Service Revenue	146.00
	Income Summary		146.00
19	Income Summary	13.00
	Retained Earnings		13.00