Question
Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2013. The annual reporting period ends
Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2013. The annual reporting period ends December 31. The trial balance on January 1, 2015, 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 | 66 | |||||
Accumulated Depreciation | $ | 6 | ||||
Software | 21 | |||||
Accumulated Amortization | 6 | |||||
Accounts Payable | 5 | |||||
Notes Payable (short-term) | 0 | |||||
Salaries and Wages Payable | 0 | |||||
Interest Payable | 0 | |||||
Income Tax Payable | 0 | |||||
Common Stock | 82 | |||||
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 | $ | 107 | $ | 107 | ||
Transactions during 2015 (summarized in thousands of dollars) follow: | |
1. | Borrowed $12 cash on a six-month note payable dated March 1, 2015. |
2. | Purchased land for future building site; paid cash, $9. |
3. | Earned revenues for 2015, $172, including $46 on credit and $126 collected in cash. |
4. | Issued additional shares of stock for $3. |
5. | Recognized salaries and wages expense for 2015, $91 paid in cash. |
6. | Collected accounts receivable, $30. |
7. | Purchased software, $10 cash. |
8. | Paid accounts payable, $13. |
9. | Purchased supplies on account for future use, $18. |
10. | Signed a $25 service contract to start February 1, 2016. |
Data for adjusting journal entries: | |
11. | Unrecorded amortization for the year on software, $6. |
12. | Supplies counted on December 31, 2015, $10. |
13. | Depreciation for the year on the equipment, $6. |
14. | Accrued interest of $1 on notes payable. |
15. | Salaries and wages earned but not yet paid or recorded, $12. |
16. | Income tax for the year was $8. It will be paid in 2016. |
3, 5 and 8. | Set up T-accounts for the accounts on the trial balance. Enter beginning balances and post the transactions 1-10, adjusting entries 11-16, and closing entry. (Enter your answers in thousands of dollars.) |
3. | Post the journal entries from requirement 2 to T-accounts and prepare an unadjusted trial balance. (Enter your answers in thousands of dollars.) |
C4-2 Part 4
4. | Record the adjusting journal entries (11) through (16). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.) |
2. Record journal entries for transactions (1) through (10). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.) View transaction list View journal entry worksheet No Transaction General Journal Debit Credit Cash 12 Notes Payable (short-term) 12 2 2 Land Cash 9 Cash 126 Accounts Receivable 46 Service Revenue 172 Cash Common Stock Salaries and Wages Expense 91 Cash 91 6 Cash 30 Accounts Receivable 30 Software 10 Cash 10 Accounts Payable 13 Cash 13 Supplies Accounts Payable 18 10 No Journal Entry Required Cash Accounts Receivable Beg. Bal Beg. Bal 30 6 9 2 91 5 10 12 46 126 30 End. Bal 21 End. Bal 51 Supplies Land Beg. Bal 12 Beg. Bal 18 12 2 End. Bal 30 End. Bal 9 Equipment Accumulated Depreciation-Equipment Beg. Bal Beg. Bal 7 13 End. Bal End. Bal 13 Software Accumulated Amortization Beg. Bal Beg. Bal 6 10 6 11 End. Bal 31 End. Bal 12 Accounts Payable Notes Payable Beg. Bal Beg. Bal 0 13 18 9 12 1 End. Bal 10 End. Bal 12 Salaries and Wages Payable Interest Payable Income Tax Payable Common Stock Beg. Bal Beg. Bal 82 3 4 End. Bal End. Bal 85 Retained Earnings Service Revenue Beg. Bal Beg. Bal 0 172 3 CE1 172 End. Bal End. Bal Depreciation Expense Amortization Expense Beg. Bal 13 Beg. Bal 6 6 CE1 End. Bal End. Bal Income Tax Expense Interest Expense Beg. Bal Beg. Bal 14 1 CE1 End. Bal End. Bal Salaries and Wages Expense Supplies Expense Beg. Bal Beg. Bal 91 99 CE1 12 10 10 CE1 15 End. Bal Fnd Ral H & H TOOL, INC Unadjusted Trial Balance (in thousands) Account Titles Debit Credit 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 lax Expense Totals C4-2 Part 5 5. Post the adjusting entries from requirement 4 and prepare an adjusted trial balance. (Enter your answers in thousands of dollars.) H & H TOOL, INC Adiusted Trial Balance in thousands) Debit Credit 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 Pavable Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Supplies Expense Depreciation Expense Amortization Expense Interest Expense Income Tax Expense Total 6.a Prepare an income statement. H & H TOOL, INC Income Statement (in thousands) 6.b Prepare a statement of retained earnings. H & H TOOL, INC Statement of Retained Earnings (in thousands) Balance, January 1, 2015 Balance, December 31, 2015 6.c Prepare balance sheet. (Amounts to be deducted should be indicated by a minus sign.) H& H TOOL, INC Balance Sheet in thousands) Equipment Software C4-2 Part 7 7. Prepare the closing journal entry. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.) View transaction list Journal entry worksheet Record entry to close revenue and expense accounts to retained earnings. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal C4-2 Part 8 8. Post the closing entry from requirement 7 and prepare a post-closing trial balance. (Enter your answers in thousands of dollars.) H & H TOOL, INC. Post-Closing Trial Balance (in thousands) Account Titles Debit Credit 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 Dividends Service Revenue Salaries and Wages Expense Supplies Expense Depreciation Expense Amortization Expense Interest Expense Income Tax Expense Totals value 1.12 points C4-2 Part 9 9-a. How much net income did H &H Tool, Inc., generate during 2015? What was its net profit margin? (Enter "Net Income" in thousands of dollars. Round "Net Profit Profit" to 2 decimal places.) Net Income Net Proft Margin 9-b. Is the company financed primarily by liabilities or stockholders' equity? Stockholders' Equity Liabilities 9-c. What is its current ratio? (Enter your answers in thousands of dollars.) Current Ratio Numerator Denominator
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