COMP$4-1($Static$)$ Recording Transactions $($Including Adjusting and Closing Entries$),$ Preparing Financial Statements, and Performing Ratio Analysis LO$4-1,4-2,4-3,4-4($GL$)$

Brothers Mike and Tim Hargenrater began operations of their tool and die shop $($H & H Tool, Inc.$)$ on January $1,2019.$ The annual reporting period ends December $31.$ The trial balance on January $1,2020,$ follows:

H & H Tool, Inc.

Trial Balance on January $1,2020$

Debit Credit

Cash $6,000$

Accounts receivable $5,000$

Supplies $13,000$

Land

Equipment $78,000$

Accumulated depreciation $($on equipment$)8,000$

Other noncurrent assets $($not detailed to simplify$)7,000$

Accounts payable

Wages payable

Interest payable

Dividends payable

Income taxes payable

Long$-$term notes payable

Common stock $(8,000$ shares, $$0\mathrm{.}50$ par value$)4,000$

Additional paid$-$in capital $80,000$

Retained earnings $17,000$

Service revenue

Depreciation expense

Supplies expense

Wages expense

Interest expense

Income tax expense

Miscellaneous expenses $($not detailed to simplify$)$

Totals $109,000109,000$

Transactions during $2020$ follow:

Borrowed $$15,000$ cash on a five$-$year, $8$ percent note payable, dated March $1,2020.$

Purchased land for a future building site; paid cash, $$13,000.$

Earned $$215,000$ in revenues for $2020,$ including $$52,000$ on credit and the rest in cash.

Sold $4,000$ additional shares of capital stock for cash at $$1$ market value per share on January $1,2020.$

Incurred $$89,000$ in wages expense and $$25,000$ in miscellaneous expenses for $2020,$ with $$20,000$ on credit and the rest paid in cash.

Collected accounts receivable, $$34,000.$

Purchased other assets, $$15,000$ cash.

Purchased supplies on account for future use, $$27,000.$

Paid accounts payable, $$26,000.$

Signed a three$-$year $$33,000$ service contract to start February $1,2021.$

Declared cash dividends on December $1,$ $$25,000,$ which were paid by December $31.[$Hint: Prepare two entries.$]$

Data for adjusting entries:

Supplies counted on December $31,2020,$ $$18,000.$

Depreciation for the year on the equipment, $$10,000.$

Interest accrued on notes payable $($to be computed$).$

Wages earned by employees since the December $24$ payroll but not yet paid, $$16,000.$

Income tax expense, $$11,000,$ payable in $2021.$