Question

3 $ 5 Required information [The following information applies to the questions displayed below.] 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 Accounts Receivable Supplies 13 Land Equipment 78 Accumulated Depreciation Software Accumulated Amortization Accounts Payable Notes Payable (short-term) Salaries and Wages Payable Interest Payable Income Tax Payable Connon Stock Retained Earnings 9 Service Revenue Salaries and Wages Expense Depreciation Expense Amortization Expense Income Tax Expense Interest Expense Supplies Expense Totals $106 $106 15 5 4 3 83 3 3 3 3 3 3 Transactions and events during 2018 (summarized in thousands of dollars) follow: a. Borrowed $11 cash on March 1 using a short-term note. b. Purchased land on March 2 for future building site: pald cash. 58. c. Issued additional shares of common stock on April 3 for $24. d. Purchased software on July 4, $11 cash. e Purchased supplies on account on October 5 for future use. $19. f. Pald accounts payable on November 6. $12. 9. Signed a $20 service contract on November 7 to start February 1, 2019. h. Recorded revenues of $180 on December 8, Including $50 on credit and $130 collected in cash. 1. Recognized salaries and wages expense on December 9. $95 paldi in cash. J. Collected accounts recelvable on December 10, $34. Data for adjusting Journal entries as of December 31: k. Unrecorded amortization for the year on software. $5. Supplies counted on December 31, 2018. $12 m. Depreciation for the year on the equipment. $5. 17. Interest of $1 to accrue on notes payable. o. Salaries and wages earned but not yet paid or recorded $13. p. Income tax for the year was $7. It will be paid in 2019.

Inlcuded are two photos with my quesiton.

Answer 1

Unadjusted trial balance means the listing of general ledger account balances at the end of reporting period before any adjusting entries are made to the balances to create financial statements.

We will pass journal entries for transactions and events occured during the year 2018 ( points a. to j. in the question)

Journal Entries:

Date	Sr. No.	Particulars	Debit ($'000)	Credit ($'000)
01-Mar-18	a.	Borrowed Short Term note:
		Cash		11
		To Notes Payable (short-term)		11
02-Mar-18	b.	Purchase of Land:
		Land	8
		To Cash		8
03-Apr-18	c.	Issued additional shares of common stock:
		Cash	24
		To Common Stock		24
04-Jul-18	d.	Purchase of Software:
		Software	11
		To Cash		11
05-Oct-18	e.	Purchase of Supplies on account:
		Supplies	19
		To Accounts Payable		19
06-Nov-18	f.	Paid Accounts Payable:
		Accounts Payable	12
		To Cash		12
06-Nov-18	g.	Signed a service contract:
		No entry / effect required as there is no financial impact in the current period i.e. 2018
08-Dec-18	h.	Revenue Recognition:
		Accounts Receivable	50
		Cash	130
		To Service Revenue		180
09-Dec-18	i.	Recognized Salaries
		Salaries and Wages Expense	95
		To Cash		95
10-Dec-18	j.	Collected Accounts Receivable
		Cash	34
		To Accounts Receivable		34

From Journal Entries, we will calculate the general ledger balances to prepare the unadjusted trial balance.

Eg. For Journal entry a. we will increase the Notes payable (short-term) by $11 and increase cash balance by $11.

The Unadjusted Trial Balance as on December 31, 2018 is as below:

H & H TOOL, INC.
Unadjusted Trial Balance
($ in thousands)
Account Titles	Debit	Credit
Cash	75
Accounts Receivable	22
Supplies	32
Land	8
Equipment	70
Accumulated Depreciation		5
Software	26
Accumulated Amortization		5
Accounts Payable		11
Notes Payable (short-term)		11
Salaries & Wages Payable		0
Interest Payable		0
Income Taxes Payable		0
Common Stock		107
Retained Earnings		9
Service Revenue		180
Salaries & Wages Expenses	95
Supplies Expenses	0
Depreciation Expense	0
Interest Expense	0
Income Tax Expense	0
Totals	328	328