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 $ 2 6 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 $106 $106

Answer 1

Closing Entries
Particulars			Debit	Credit
Service revenue			$ 180.00
To Income summary				$ 180.00
Income Summary			$ 133.00
To Salaries and Wages Expense				$ 108.00
To Depreciation Expense				$      5.00
To Amortization expense				$      5.00
To Income tax expense				$      7.00
To Interest expense				$      1.00
To Supplies expense				$      7.00
Income Summary			$   47.00
To Retained Earnings				$   47.00

Workings:

	Income Statement
	Service Revenue				$ 180.00
Less:	Salaries and Wages Expense			$ 108.00
	Depreciation Expense			$      5.00
	Amortization expense			$      5.00
	Income tax expense			$      7.00
	Interest expense			$      1.00
	Supplies expense			$      7.00	$ 133.00
		Net Income			$   47.00