Question
Brothers Herm and Steve Hargenrater began operations of their tool and die shop (H & H Tool) on January 1, 1987, in Meadville, PA. The
Brothers Herm and Steve Hargenrater began operations of their tool and die shop (H & H Tool) on January 1, 1987, in Meadville, PA. The annual reporting period ends December 31. Assume that the trial balance on January 1, 2023, was as follows:
H & H Tool | ||
---|---|---|
Trial Balance on January 1, 2023 | ||
(dollars in millions, except par value) | ||
Account Titles | Debit | Credit |
Cash | 4 | |
Accounts receivable | 3 | |
Supplies | 12 | |
Land | ||
Equipment | 79 | |
Accumulated depreciation (on equipment) | 9 | |
Other noncurrent assets (not detailed to simplify) | 8 | |
Accounts payable | ||
Wages payable | ||
Interest payable | ||
Dividends payable | ||
Income taxes payable | ||
Long-term notes payable | ||
Common stock (8 million shares, $0.50 par value) | 6 | |
Additional paid-in capital | 81 | |
Retained earnings | 10 | |
Service revenue | ||
Depreciation expense | ||
Supplies expense | ||
Wages expense | ||
Interest expense | ||
Income tax expense | ||
Miscellaneous expenses (not detailed to simplify) | ||
Totals | 106 | 106 |
Transactions during 2023 follow. All dollars are in millions, except per share amounts:
- Borrowed $20 cash on a 5-year, 12 percent note payable, dated March 1, 2023.
- Sold 6 million additional shares of common stock for cash at $1 market value per share on January 1, 2023.
- Purchased land for a future building site; paid cash, $12.
- Earned $223 in revenues for 2023, including $50 on credit and the rest in cash.
- Incurred $90 in wages expense and $26 in miscellaneous expenses for 2023, with $21 on credit and the rest paid in cash.
- Collected accounts receivable, $35.
- Purchased other noncurrent assets, $12 cash.
- Purchased supplies on account for future use, $24.
- Paid accounts payable, $22.
- Declared cash dividends on December 1, $22.
- Signed a three-year $30 service contract to start February 1, 2024.
- Paid the dividends in (j) on December 31.
Data for adjusting entries:
- Supplies counted on December 31, 2023, $15.
- Depreciation for the year on the equipment, $11.
- Interest accrued on notes payable (to be computed).
- Wages earned by employees since the December 24 payroll but not yet paid, $14.
- Income tax expense, $10, payable in 2024.
A. Income Statement tab - Use the drop-downs to select the accounts that should be properly included on the Income Statement. Compute earnings per share. The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection.
B. Use the drop-downs to select the accounts that should be properly included on the statement of stockholders' equity and enter the appropriate amounts. Note: Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions rather than in dollars (for example, 5 million should be entered as 5 rather than 5,000,000).
\begin{tabular}{|l|l|} \hline \multicolumn{2}{|c|}{ H \& H Tool } \\ \hline \multicolumn{2}{|c|}{ Income Statement } \\ \hline Operating revenues: & \\ \hline & \\ \hline & \\ \hline Operating expenses: & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline Total operating expenses & \\ \hline & \\ \hline Other item: & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|l|} \hline \multicolumn{5}{|c|}{ H \& H TOOL } \\ \hline \multicolumn{5}{|c|}{ Statement of Stockholders' Equity } \\ \hline & \begin{tabular}{c} Common \\ Stock \end{tabular} & \begin{tabular}{c} Additional \\ Paid-in \\ Capital \end{tabular} & \begin{tabular}{c} Retained \\ Earnings \end{tabular} & \begin{tabular}{c} Total \\ Stockholders' \\ Equity \end{tabular} \\ \hline Balance, January 1, 2023 & & & & \\ \hline & & & & \\ \hline & & & & \\ \hline & & & & \\ \hline Balance, December 31, 2023 & & & & \\ \hline \end{tabular}Step by Step Solution
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