In: Accounting
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 | $ | 2 | ||||
Accounts Receivable | 6 | |||||
Supplies | 13 | |||||
Land | 0 | |||||
Equipment | 64 | |||||
Accumulated Depreciation | $ | 5 | ||||
Software | 18 | |||||
Accumulated Amortization | 4 | |||||
Accounts Payable | 4 | |||||
Notes Payable (short-term) | 0 | |||||
Salaries and Wages Payable | 0 | |||||
Interest Payable | 0 | |||||
Income Tax Payable | 0 | |||||
Common Stock | 81 | |||||
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 | $ | 103 | $ | 103 | ||
Transactions and events during 2018 (summarized in thousands of dollars) follow:
Data for adjusting journal entries as of December 31:
9-a. How much net income did H & H Tool, Inc., generate during 2018? What was its net profit margin?
9-b. Is the company financed primarily by liabilities or stockholders’ equity?
9-c. What is its current ratio?