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 13 64 $ 5 18 4 4 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 OOOOO OOOOOO 0 $103 $103 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; paid cash, $8. c. Issued additional shares of common stock on April 3 for $27. d. Purchased software on July 4, $11 cash. e. Purchased supplies on account on October 5 for future use, $19. f. 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 $168 on December 8, including $44 on credit and $124 collected in cash. i. Recognized salaries and wages expense on December 9, $89 paid in cash. 1. Collected accounts receivable on December 10, $28. Data for adjusting journal entries as of December 31: k. Unrecorded amortization for the year on software, $4. 1. Supplies counted on December 31, 2018, $12. m. Depreciation for the year on the equipment, $5. n. 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. Credit 49 22 32 8 64 $ 5 29 4 4 H & H TOOL, INC. Unadjusted Trial Balance At December 31, 2018 (in thousands) Account Titles Debit Cash $ Accounts Receivable Supplies Land Equipment Accumulated Depreciation Software Accumulated Amortization Accounts Payable Notes Payable (short-term) Salaries and Wages Payable Interest Payable Income Taxes Payable Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Supplies Expense Depreciation Expense Interest Expense Income Tax Expense Totals $ 11 11 85 9 168 89 293 $ $ 293 1 Record the unrecorded amortization for the year on software, $4. 2 Record the adjusting entry for supplies counted on December 31, 2018 for $12. Record the adjusting entry for depreciation for the year on the equipment, $5. 4 Record the adjusting entry for accrued interest for $1 on notes payable. 5 Record the adjusting entry for salaries and wages earned but not paid for $13. 6 Record the adjusting entry for income tax for the year was $7. It will be paid in 2019. Debit Credit 49 22 12 8 64 10 29 8 11 H&H TOOL, INC. Adjusted Trial Balance At December 31, 2018 (in thousands) 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 Supplies Expense Depreciation Expense Amortization Expense Interest Expense Income Tax Expense Total 11 13 1 7 85 9 168 102 20 5 4 1 7 $ 323 $ 323 Req 6A Req 6B Req 6C Prepare an income statement. (Enter your answers in thous H & H TOOL, INC. Income Statement (in thousands) 0 0 H & H TOOL, INC. Statement of Retained Earnings (in thousands) Balance, January 1, 2018 Balance, December 31, 2018 $ 0 H & H TOOL, INC. Balance Sheet (in thousands) 0 0 0 0 0 $ 0 $ 0
