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) Debit Credit Account Titles $ Cash 2 Accounts Receivable 6 Supplies 13 Land 0 Equipment Accumulated Depreciation Software Accumulated Amortization 70 $ 5 15 5 Accounts Payable Notes Payable (short- term) Salaries and Wages Payable Interest Payable Income Tax Payable 4 Common Stock 83 Retained Earnings 9 Service Revenue Salaries and Wages Expense Depreciation Expense Amortization Expense Income Tax Expense Interest Expense 0 0 Supplies Expense $106 $106 Totals

Answer 1

H & H Tool, Inc. (Amount in '000) Debit in $ Credit in $ Journal Enteries Date Particulars 1.3.2018 Cash a/c Dr. To Note Payable (Being Note Payable issued) 2.3.2018 Land a/c Dr. To Cash (Being Land purchased in cash) 8.12.2018 Cash a/c Dr. Accounts Receivable a/c Dr. To service revenue (Being Revenue earned in cash and credit) 180 3.4.2018 24 Cash a/c Dr. To Common Stock (Being Common Stock issued for cash) 9.12.2018 |Salaries and wages expense a/c Dr. To Cash (Being salaries and wages paid in cash) 10.12.2018 Cash a/c Dr. To Accounts Receivable (Being Cash received from debtors) 4.7.2018 Software a/c Dr. To Cash (Being Software purchased for cash) 11 6.11.2018 Accounts Payable a/c Dr. To Cash (Being Accounts Payable paid in cash) 12 5.10.2018 Supplies a/c Dr. To Accounts Payable (Being Supplies purchased on account)

Adjusting Enteries Date Particulars Debit in $ Credit in $ 31.12.2018 Amortization on software a/c Dr. To accumulated amortization |(Being amortization of software charged to Software) 31.12.2018 Supplies Expense a/c Dr. 20 To Supplies (Being Supplies expense charged to Supplies) 20 Dr. 31.12.2018 Depreciation a/c 5 To accumulated depreciation |(Being Depreciation on equipment charged to Equip.) 5 31.12.2018 Interest Expense a/c Dr. To Interest Payable |(Being Interest accrued on Note Payable) 31.12.2018 Salaries and wages expense a/c Dr. To Salaries and wages payable (Being Salary Expense accrued) Dr. 31.12.2018 Income tax expense a/c To Income Tax Payable (Being Income tax accrued) 108 Closing Enteries Date Particulars Debit in $Credit in $ 31.12.2018 Income Summary a/c Dr. 153 To Salaries and wages expense To Depreciation Expense To Amortization Expense To Income tax expense To Interest Expense To Supplies Expense (Being expense accounts closed 5 20 31.12.2018 Service Revenue a/c Dr. To Income Summary Being Revenue accounts closed 180 31.12.2018 Income Summary a/c Dr. To Retained Earnings (Being Income summary closed)

Adjusted Trial Balance For the period ending 31.12.2018 Unadjusted Adjustment Adjusted Post Closing Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 2 20 10 Particulars Cash Accounts Receivable Supplies land Equipment Accumulated depreciation Software Accumulated Amortization Accounts Payable Notes Payable (short term) Salaries and wages payable Interest Payable Income Tax Payable Common Stock Retained Earning Service revenue Salaries and wages expense Depreciation Expense Amortization Expense Income tax expense Interest Expense Supplies Expense Totals 107 107 9 9 36 180 180 95 20 366 335 335 51 51 366 213 213

Notes Payable (short term) Cash Bal. 11 Notes Payable (shor Service revenue Common Stock Accounts Receivable Cash 2 land 11 Salaries and wages ex 130 Software 24 Accounts Payable 34 Bal 201 Salaries and wages payable Salaries and wages e 13 Bal Accounts Receivable 6 Cash Bal. Service revenue Interest Payable Interest Expense Bal 56 Income Tax Payable Income tax expense Bal. Accounts Payable Supplies 13 Supplies Expense 19 Bal 32 Ral Common Stock Land Bal 107 Bal. Bal 107 107 Bal 107 Equipment Retained Earning Bal 36 Income Summary Bal. 27 Bal 36 36 70

Accumulated depreciation Bal 10 Depreciation Expense 10 Bal. 10 Software Bal. Cash 11 Bal 26 Bal Accumulated Amortization Bal. 10 Amortization Expense 10 10 Cash Accounts Payable 12 Bal. Supplies Bal

180 Statement of Income For the period ending 31.12.2018 Service revenue Less: Salaries and wages expense Depreciation Expense Amortization Expense Income tax expense Interest Expense Supplies Expense Net Income 153 Statement of Retained Earnings For the period ending 31.12.2018 1.1.2018 Net Income

Amounts in $ Amounts in $ Balance sheet As at 31.12.2018 Assets Amounts in $ Amounts in $ Liabilities Current Assets Current Liabilities Cash Accounts Payable Accounts Receivable Notes Payable (short term) Supplies 109 Salaries and wages payable Interest Payable Non Current Assets Income Tax Payable land Equipment Shareholders equity Accumulated deprecia 60 Common Stock Software Retained Earning Accumulated Amortiza -10 16 Total Assets 193 Total Liabilities & equity 50 107 36 143 193