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Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends
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 | $ | 3 | ||||
Accounts Receivable | 5 | |||||
Supplies | 12 | |||||
Land | 0 | |||||
Equipment | 69 | |||||
Accumulated Depreciation | $ | 6 | ||||
Software | 24 | |||||
Accumulated Amortization | 4 | |||||
Accounts Payable | 5 | |||||
Notes Payable (short-term) | 0 | |||||
Salaries and Wages Payable | 0 | |||||
Interest Payable | 0 | |||||
Income Tax Payable | 0 | |||||
Common Stock | 90 | |||||
Retained Earnings | 8 | |||||
Service Revenue | 0 | |||||
Salaries and Wages Expense | 0 | |||||
Depreciation Expense | 0 | |||||
Amortization Expense | 0 | |||||
Income Tax Expense | 0 | |||||
Interest Expense | 0 | |||||
Supplies Expense | 0 | |||||
Totals | $ | 113 | $ | 113 | ||
Transactions and events during 2018 (summarized in thousands of dollars) follow:
- Borrowed $12 cash on March 1 using a short-term note.
- Purchased land on March 2 for future building site; paid cash, $9.
- Issued additional shares of common stock on April 3 for $23.
- Purchased software on July 4, $10 cash.
- Purchased supplies on account on October 5 for future use, $18.
- Paid accounts payable on November 6, $13.
- Signed a $25 service contract on November 7 to start February 1, 2019.
- Recorded revenues of $178 on December 8, including $49 on credit and $129 collected in cash.
- Recognized salaries and wages expense on December 9, $94 paid in cash.
- Collected accounts receivable on December 10, $33.
Data for adjusting journal entries as of December 31:
- Unrecorded amortization for the year on software, $4.
- Supplies counted on December 31, 2018, $10.
- Depreciation for the year on the equipment, $6.
- Interest of $1 to accrue on notes payable.
- Salaries and wages earned but not yet paid or recorded, $12.
- Income tax for the year was $8. It will be paid in 2019.
- Post the closing entry from requirement 7 and prepare a post-closing trial balance.
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