COMP4-1 (Algo) Recording Transactions (Including Adjusting and Closing Entries), Preparing Financial Statements LO4-1, 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: Credit Debit 5,000 4,000 27,000 94,000 13,000 8,000 H & H Tool, Inc. Trial Balance on January 1, 2020 Account Titles Cash Accounts receivable Supplies Land Equipment Accumulated depreciation (on equipment) Other noncurrent assets (not detailed to simplify) Accounts payable Wages payable Interest payable Dividends payable Income taxes payable Long-term notes payable Common stock (8,000 shares, $.50 par value) Additional paid-in capital Retained earnings Service revenue Depreciation expense Supplies expense Wages expense Interest expense Income tax expense Miscellaneous expenses (not detailed to simplify) Totals 4,000 96,000 25,000 138,000 138,000 Transactions during 2020 follow: a. Borrowed $24,000 cash on a 5-year, 10 percent note payable, dated March 1, 2020. b. Purchased land for a future building site on March 15, 2020; paid cash, $19,000. c. Earned $308,000 in revenue. Transactions dated August 30, 2020, including $65,000 on credit and the rest in cash. d. Sold 4,000 additional shares of capital stock for cash at $1 market value per share on January 1, 2020. e. Incurred $105,000 in wages expense and $41,000 in miscellaneous expenses for 2020, with $36,000 on credit and the rest paid in cash. f. Collected accounts receivables on November 10, 2020, $40,000. g. Purchased other assets on November 15, 2020, $14,000 cash. h. Purchased supplies on account for future use on December 1, 2020, $39,000. i. Paid accounts payable on December 15, 2020, $38,000. j. Signed a three-year $45,000 service contract on December 17, 2020 to start February 1, 2021. k. Declared cash dividends on December 1, 2020, $20,000, which were paid by December 31. Data for adjusting entries: 1. Supplies counted on December 31, 2020, $30,000. m. Depreciation for the year on the equipment, $15,000. n. Interest accrued on notes payable (to be computed). o. Wages earned by employees since the December 24 payroll but not yet paid, $17,000. p. Income tax expense, $14,000, payable in 2021. Requirement General Journal General Ledger Trial Balance Income Statement Statement of SE Balance Sheet Requirement General Journal General Ledger Trial Balance Income Statement Statement of SE Balance Sheet General Journal tab - (Step 1) Prepare the journal entries to record the first 12 transactions (transactions (a) through (k)). Review the accounts as shown in the General Ledger and Trial Balance tabs. (Step 2) Prepare the necessary adjusting entries (13) through (16) (transactions (i) through (p)) to correctly report net income for the period. (Step 3) After preparing the financial statements, record the closing entry (17). Notice the effect on the trial balance, income statement, and balance sheet tabs once the closing entry is posted. General Ledger tab - Each journal entry is posted automatically to the General Ledger. Use the drop-down button to view the unadjusted, adjusted, or post-closing balances in the General Ledger. Trial Balance tab - You may view either the unadjusted, adjusted, or post-closing trial balance by choosing from the drop- down. Your choice will determine the reported values on the financial statement tabs. 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. Statement of Stockholders' Equity tab - Use the drop-downs to select the accounts that should be properly included on the Statement of Stockholders' Equity and enter the appropriate amounts. Balance Sheet tab - Use the drop-downs to select the accounts that should be properly included on the Balance Sheet. The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection. Requirement General Journal > prehensive problem -journal entries thru Financial Stat... A Saved 1 Adjusted H & H Tool, Inc. Income Statement For the Year Ended December 31, 2020 Operating revenues: ook int Operating expenses: rences Total operating expenses 0 0 Other item: 0 $ 0 Net income Earnings per share Requirement General Journal General Ledger Trial Balance Income Statement Statement of SE Balance Sheet Use the drop-downs to select the accounts that should be properly included on the statement of stockholders' equity and enter the appropriate amounts. (Amounts to be deducted should be indicated with a minus sign.) H&H TOOL, INC. Statement of Stockholders' Equity For the Year Ended December 31, 2020 Additional Common Paid-in Stock Capital Retained Earnings Total Stockholders' Equity $ 0 Balance, January 1, 2020 $ 0 0 0 0 Balance, December 31, 2020 $ 0 $ 0 $ 0 $ 0 Adjusted H & H TOOL, INC. Balance Sheet At December 31, 2020 Assets Liabilities Current assets: Current liabilities: 0 Total current liabilities 0 Total current assets Property, plant and equipment: Total liabilities 0 Stockholders' equity Net property, plant and equipment 0 Total stockholders' equity 0 Total assets $ 0 Total liabilities and stockholders' equity $ 0 LIL Prev 1 of 1 Next