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	$	4
Accounts Receivable		4
Supplies		11
Land		0
Equipment		56
Accumulated Depreciation				$	7
Software		17
Accumulated Amortization					4
Accounts Payable					6
Notes Payable (short-term)					0
Salaries and Wages Payable					0
Interest Payable					0
Income Tax Payable					0
Common Stock					68
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 and events during 2018 (summarized in thousands of dollars) follow:

1. Borrowed $13 cash on March 1 using a short-term note.
2. Purchased land on March 2 for future building site; paid cash, $7.
3. Issued additional shares of common stock on April 3 for $28.
4. Purchased software on July 4, $12 cash.
5. Purchased supplies on account on October 5 for future use, $17.
6. Paid accounts payable on November 6, $14.
7. Signed a $30 service contract on November 7 to start February 1, 2019.
8. Recorded revenues of $152 on December 8, including $36 on credit and $116 collected in cash.
9. Recognized salaries and wages expense on December 9, $81 paid in cash.
10. Collected accounts receivable on December 10, $20.

Data for adjusting journal entries as of December 31:

11. Unrecorded amortization for the year on software, $4.
12. Supplies counted on December 31, 2018, $11.
13. Depreciation for the year on the equipment, $7.
14. Interest of $2 to accrue 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 2019.

1. 1, 3, 5 and 8. Set up T-accounts for the accounts on the trial balance. Enter beginning balances and post the transactions (a)-(j), adjusting entries (k)-(p), and closing entry. (Enter your answers in thousands of dollars.)

Answer 1

Cash
Beg. bal.	4	b.	7
a.	13	d.	12
c.	28	f.	14
h.	116	i.	81
j.	20
End. bal.	67
Accounts Receivable
Beg. bal.	4	j.	20
h.	36
End. bal.	20
Supplies
Beg. bal.	11	i.	17
e.	17
End. bal.	11
Land
Beg. bal.	0
b.	7
End. bal.	7
Equipment
Beg. bal.	56
End. bal.	56
Accumulated Depreciation
		Beg. bal.	7
		m.	7
		End. bal.	14
Software
Beg. bal.	17
d.	12
End. bal.	29
Accumulated Amortization
		Beg. bal.	4
		k.	4
		End. bal.	8
Accounts Payable
f.	14	Beg. bal.	6
		e.	17
		End. bal.	9
Notes Payable
		Beg. bal.	0
		a.	13
		End. bal.	13
Salaries and Wages Payable
		Beg. bal.	0
		o.	13
		End. bal.	13
Interest Payable
		Beg. bal.	0
		n.	2
		End. bal.	2
Income Tax Payable
		Beg. bal.	0
		p.	9
		End. bal.	9
Common Stock
		Beg. bal.	68
		c.	28
		End. bal.	96
Retained Earnings
Salaries and Wages Expense	94	Beg. bal.	7
Depreciation Expense	7	Service Revenue	152
Amortization Expense	4
Income Tax Expense	9
Interest Expense	2
Supplies Expense	17
		End. bal.	26
Service Revenue
RE	152	Beg. bal.	0
		h.	152
		End. bal.	0
Salaries and Wages Expense
Beg. bal.	0	RE	94
i.	81
o.	13
End. bal.	0
Depreciation Expense
Beg. bal.	0	RE	7
m.	7
End. bal.	0
Amortization Expense
Beg. bal.	0	RE	4
k.	4
End. bal	0
Income Tax Expense
p.	9	RE	9
End. bal.	0
Interest Expense
n.	2	RE	2
End. bal.	0
Supplies Expense
l.	17	RE	17
End. bal.	0