Question

Required information [The following information applies to the questions displayed below) Brothers Harry and Herman Housyerday began operations of their machine shop (M&Tool, Inc.) on January 2016. The annual reporting period ends December 31 The trial balance on January 2 2018 follows the amounts are rounded to thousands of dollars to simply Rent Istia Transactions and events during 2018 summarized in thousands of dollars) follow Borrowed $11 cash on March 1 using a short-term note. b. Purchased and on March 2 for future building site; paid cash. $e. c.Issued additional shares of common stock on April 3 for $24 d. Purchased software on July 4, $11 cash. Purchased supplies on account on October 5 for future use. $19. Paid accounts payable on November 6, $12 g. Signed a $20 service contract on November 7 to start February 1, 2019 h. Recorded revenues of $100 on December 8, including $50 on credit and $150 collected in cash L. Recognized salaries and wages expense on December 9, 995 paid in cash Collected accounts receivable on December 10, $34 Data for adjusting journal entries as of December 3 k Unrecorded amortization for the year on software, SS. Supples counted on December 2010 $12 Depreciation for the year on the equipment. $S. it. Interest of $1 to sccrue on notes payable a: Salaries and wages earned but not yet paid or recorded. $13 Income tax for the year was $7. It will be paid in 2019

Answer 1

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 180 95 Totals 335 335 51 51 366 366 213 213 27 Net Income Net profit margin = Net Income / Sales = 27/ 180 = 15% Debt to Equity = Total Liabilities/Total Equity = 50/143 = 34.97% Since debt equity ratio is 34.97% the company is primarily financed by Equity