C4-2 (Algo) From Recording Transactions (Including Adjusting Journal Entries) to Preparing Financial Statements and Closing Journal Entries (Chapters 2, 3, and 4) [LO 2-3, LO 3-3, LO 4-1, LO 4-2, LO 4-3, LO 4-4, LO 4-5, LO 4-6]

Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Incorporated) on January 1, 2020. The annual reporting period ends December 31. The trial balance on January 1, 2021, follows (the amounts are rounded to thousands of dollars to simplify):

Account Titles	Debit	Credit
Cash	$ 2
Accounts Receivable	6
Supplies	13
Land	0
Equipment	61
Accumulated Depreciation		$ 5
Software	15
Accumulated Amortization		6
Accounts Payable		4
Notes Payable (short-term)		0
Salaries and Wages Payable		0
Interest Payable		0
Income Tax Payable		0
Common Stock		73
Retained Earnings		9
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	$ 97	$ 97

Transactions and events during 2021 (summarized in thousands of dollars) follow:

Borrowed $11 cash on March 1 using a short-term note.

Purchased land on March 2 for future building site; paid cash, $8.

Issued additional shares of common stock on April 3 for $24.

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.

Signed a $20 service contract on November 7 to start February 1, 2022.

Recorded revenues of $162 on December 8, including $41 on credit and $121 collected in cash.

Recognized salaries and wages expense on December 9, $86 paid in cash.

Collected accounts receivable on December 10, $25.

Data for adjusting journal entries as of December 31:

Unrecorded amortization for the year on software, $6.

Supplies counted on December 31, 2021, $12.

Depreciation for the year on the equipment, $5.

Interest of $1 to accrue on notes payable.

Salaries and wages earned but not yet paid or recorded, $13.

Income tax for the year was $7. It will be paid in 2022.

C4-2 (Algo) Part 6

Required:

6-a. Prepare an income statement.

6-b. Prepare the statement of retained earnings.

6-c. Prepare the balance sheet.

C4-2 (Algo) Part 7

Required:

Prepare the closing journal entry.

C4-2 (Algo) T accounts

Required:

T accounts. Enter beginning balances and post journal entries from Part 2, the adjusting journal entries from Part 4, and the closing entry from Part 7.