Question

Required information

C4-2 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]

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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		60
Accumulated Depreciation				$	6
Software		15
Accumulated Amortization					5
Accounts Payable					5
Notes Payable (short-term)					0
Salaries and Wages Payable					0
Interest Payable					0
Income Tax Payable					0
Common Stock					71
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	$	95		$	95

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 $23.
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 $160 on December 8, including $40 on credit and $120 collected in cash.
1. Recognized salaries and wages expense on December 9, $85 paid in cash.
10. Collected accounts receivable on December 10, $24.

Data for adjusting journal entries as of December 31:

11. Unrecorded amortization for the year on software, $5.

50. Supplies counted on December 31, 2018, $10.

1000. 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.

*********Prepare an unadjusted trial balance. (Enter your answers in thousands of dollars.)

******** & Post the adjusting entries from requirement 4 and prepare an adjusted trial balance. (Enter your answers in thousands of dollars.)

Answer 1

Refer to the below images for the above asked questions, in a detailed way of solution.

Solution : preparation of Journal entries: (Amounts in thousands) particulars Debit Credit cash All Dr fir To Notes payable (Short-term) $ 12 (Being borrowed cash on note) land ale or To co c 41 (Being purchased land for future building lite) Cash ale or To common Stock $ 23 (Being issued common stone for cash) Software ale or To cash ate fto (Being purchared additional Software) $18 418 supplies Alc or To Accounts payable (Bong purchased Supplies for future use) Accounts To (Being payable Alc. or Cash Ale paid creditors) No entry required, no revenue earned in 2018 - 120 & 40 $ 160 Cash ale or Altoounts Receivable Ale or To Service Revenue (Being Service revenues during 2018) earred

particolars Debit credit $85 . $85 salaries by wages exponse ale or је са 31 (Being Salaries & wager expense during 2015) incorred $24 cash ale or To Accounts (Being collected $24 Receivable all on costomers accounts) HGH Tool, Inc. unadiosted Trial Balance At December 31, 2018 (in thousands) particolars Debit credit Cash Accounts Receivable Supplies Land Equipment Accemulated depreciation Software Accormulated Amortgation Accounts payable Notes pagable salaries & wagy payable Interest payable Common Stock Retained earnings Service Reverne salaris y wagg expenre Supplies expense Dep. exponse Interest expense Income tax expense Total $ 295 1295

Journal entries (Adjustments) particulars Debit evedit K 45 ton exponse ale or To Accomolated Amortization to record amortization as given) (Being 520 ale or $20 supplies To (Being expense Supplies to record supplies used [$ 12+118 $ 6 Depreciation expense ale or To Accomolated Deprecation (Being to record dep. as given) Interest expense To Interest (Being to accrue ale or payable interest for Mar-Dec, 2018) 12 salaries is wages expense Atc Dr To Solarice is wages payable (Being to accrue wages incorred but not paid). $8 Income tax expense ale Dr To Encome tax payable (Being to accrue income tax) S8

Hн то, іnс. Adjusted Trial Balance AT December 31, 2018 (in thousands) particulars credit Debit $65 Cash Accounts Recarable Supplies Land equipment Accumulated Depreciation Software Accunulated Amortization Accounts payable Notes payable salaris es wages payable Interest payable Income tax payable common stock Retained earrings Service Revenue Salaries & wages expense supplies expense Depreciation expense Amortization expense Interest expense Income tax expense Total $327 $327