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.

It also says its incomplete, and I don't know what am I missing.

Answer 1

($ in 000s) Debit Credit $12 $12 S23 $23 $10 $18 $18 Step 1 Journal entry for Transaction for 2018 Date Particulars 1-Mar-18 Cash Notes Payable (To Record borrowing of cash) 2-Mar-18 Land Cash (To Record purchase of land) 3-Apr-18 Cash Common Stock (To Record issue of common sck) 4-Jul-18 Software Cash (To Record purchase of software) 5-Oct-18 Supplies Accounts Payable (To Record purchase of supplies) 6-Nov-18 Accounts Payable Cash (To Record payment made) 7-Nov-18 No Entry No Entry (On signing of service contract) 8-Dec-18 Accounts Receivable Cash Service Revenue (To Record sales) 9-Dec-18 Salaries and Wages Expense Cash (To Record salary expense) 10-Dec-18 Cash Accounts Receivable (To Record payment received) $13 $40 $120 $160 $85 $85 $24

Step 2 Adjusting Entries ($ in 000s) Debit Credit $20 Date Particulars 31-Dec-18 Amortisation Expense Accumulated Amortisation (To Record Amortisation on sofware) 31-Dec-18 Supplies Expesne Supplies (To Record supplies Expense) 31-Dec-18 Depreciation Expense Accumulated Depreciation ( To Record Depreciation on Equipment) 31-Dec-18 Interest Expense Interest Payable (To Record interest accrue on notes payable) 31-Dec-18 Salaries and Wages Expense Salaries and Wages Payable ( To Record interest accrue on notes payable) 31-Dec-18 Income Tax Expense Income Tax Payable (To Record income tax provision) Working Supplies Expense Supplies Opening as on 01/01/2018 Add: Purchases $12 $18 $30 ($10) $20 Less: Closing as on 31/12/2018 Supplies Expense

Step3 Hand H Tool Inc ($ in 000s) Trial Balance January 1, 2018 Debit Credit Entry Adjustment Debit $179 Credit $117 $24 Adjusted Trail Balance December 31, 2018 Debit Credit $65 $21 $5 Particulars Cash Accounts Receivable Supplies Land Equipment Accumulated Depreciation Software Accumulated Amortisation Accounts Payable Notes Payable Salaries and Wages Payable Interest Payable Income Tax Payable Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Depreciation Expense Amortisation Expense Interest Expense Income Tax Expense Supplies Expesne $95 $406 $327 $327

Amount $160 Step 4 Hand H Tool Inc Income Statement For the year ended 31st December 2018 ($ in 000s) Particulars Amount Service Revenue Less: Operating Expense Salaries and Wages Expense Depreciation Expense Amortisation Expense Interest Expense Supplies Expesne $20 Total Operating Expense Operating Income Less: Income Tax Expense Net Income $97 ($129) $31 ($8) $23 Step 5 Hand Tool Ing Statement of Retained Earnings For the year ended 31st December 2018 ($ in 000s) Particulars Retained Earnings at 1st January 2018 Net Income for the year ended 31st December 2018 Amount $23 Retained Earnings at 31st December 2018 S31

Amount Hand Tool Inc Balance Sheet December 31, 2018 ($ in 000s) Amount Amount Liabilities $65 Accounts Payable $21 Notes Payable $10 Salaries and Wages Payable Interest Payable Income Tax Payable Assets Cash Accounts Receivable Supplies $10 $12 Total Current Assets $96 Total Current Liabilities Land Equipment Less: Accumulated Depreciation $60 ($12) $9 Shareholders' Equity Common Stock Retained Earnings $48 Total Shareholders' Equity $94 $31 $125 Software Less: Accumulated Amortisation $25 ($10) $15 Total Assets $168 Total Liabilities and Shareholder's Equity $168