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):

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 con Account Titles 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 Earnings Service Revenue Salaries and Wages Expense Depreciation Expense Amortization Expense Income Tax Expense Interest Expense Supplies Expense Totals 00 Rooooooo $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.
9. 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.
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.

Answer 1

Journal Entries Date Account Title and Explaination Debit Credit Post. Ref. a 12.00 Cash Notes Payable (To record Cash borrowed by issuing Notes Payable) 12.00 b 9.00 Land Cash (To record Land Purchased) S 9.00 23.00 Cash Common Stock (To record Common Stock issued for Cash) $ 23.00 10.00 Software Cash |(To record Software Purchased for Cash) 10.00 e 18.00 Supplies Accounts Payable (To record supplies purchased on account) 18.00

13.00 Accounts Payable Cash (To record Payment of Payables) 13.00 No Journal Entry Required for Signing a Contract $ 40.00 120.00 Accounts Receivable Cash Sales Revenue (To record Sales Revenue) 160.00 $ 85.00 Salaries and Wages Expense Cash (To record Salaries and Wages Expenses paid) 85.00 $ 24.00 Cash Accounts Receivable (To record Collection of receivables) 24.00

5.00 Adjusting Entries Amortization Expense Accumulated Amortization - Software (To record Amortization Expense) 5.00 20.00 Supplies Expense ($12+$18-$10) Supplies (To record Consumpton of Supplies) 20.00 6.00 Depreciation Expense Accumulated Depreciation - Equipment (To record Depreciation Expense) 6.00 n Inter 1.00 Interest Expense Interest Payable (To record accrued interest expense) $ 1.00 12.00 Salaries and Wages Expense Salaries and Wages Payable (To record accrued salaries and wages expenses) 12.00 8.00 Income Tax Expense Income Tax Payable (To record Income Tax Payable) 8.00