Question

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		63
Accumulated Depreciation				$	6
Software		18
Accumulated Amortization					8
Accounts Payable					5
Notes Payable (short-term)					0
Salaries and Wages Payable					0
Interest Payable					0
Income Tax Payable					0
Common Stock					74
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	$	101		$	101

Transactions and events during 2018 (summarized in thousands of dollars) follow:

1. Borrowed $12 cash on March 1 using a short-term note.
2. Purchased land on March 2 for future building site; paid cash, $9.
3. Issued additional shares of common stock on April 3 for $26.
4. Purchased software on July 4, $10 cash.
5. Purchased supplies on account on October 5 for future use, $18.
6. Paid accounts payable on November 6, $13.
7. Signed a $25 service contract on November 7 to start February 1, 2019.
8. Recorded revenues of $166 on December 8, including $43 on credit and $123 collected in cash.
9. Recognized salaries and wages expense on December 9, $88 paid in cash.
10. Collected accounts receivable on December 10, $27.

Data for adjusting journal entries as of December 31:

11. Unrecorded amortization for the year on software, $8.
12. Supplies counted on December 31, 2018, $10.
13. Depreciation for the year on the equipment, $6.
14. Interest of $1 to accrue on notes payable.
15. Salaries and wages earned but not yet paid or recorded, $12.
16. Income tax for the year was $8. It will be paid in 2019.

Record the adjusting journal entries (k) through (p).

1.Record the unrecorded amortization for the year on software, $8.

2.Record the adjusting entry for supplies counted on December 31, 2018 for $10.

3.Record the adjusting entry for depreciation for the year on the equipment, $6.

4.Record the adjusting entry for accrued interest for $1 on notes payable.

5.Record the adjusting entry for salaries and wages earned but not paid for $12.

6.Record the adjusting entry for income tax for the year was $8. It will be paid in 2019.

Answer 1

supplies expense = $12 +$18 - $10 = $20 (in thousands) debit credit date account titles and explanation 31-Dec Amortization Expense Accumulated Amortization to record Amortization Expense) 2 $ 20 31-Dec Supplies Expense Supplies (to record Supplies Expense) $ 20 3 31-Dec Depreciation Expense Accumulated Depreciation to record Depreciation Expense) S6 4 31-Dec Interest Expense Interest Payable (to record Interest Expense) 5 $ 12 31-Dec Salaries and Wages Expense Salaries and Wages Payable (to record Salaries and Wages Expense) $ 12 6 $8 31-Dec Income Tax Expense Income Tax Payable (to record Income Tax Expense)

In case you have any query, kindly ask in comments.