COMP4-1 (Static) Recording Transactions (Including Adjusting and Closing Entries), Preparing Financial Statements, and Performing Ratio Analysis 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: H & H Tool, Inc. Trial Balance on January 1, 2020 Credit Debit 6,000 5,000 13,000 78,000 8,000 7,000 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, $0.50 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 80,000 17,000 109,000 109,000 Transactions during 2020 follow: a. Borrowed $15,000 cash on a five-year, 8 percent note payable, dated March 1, 2020. b. Purchased land for a future building site; paid cash, $13,000. c. Earned $215,000 in revenues for 2020, including $52,000 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 $89,000 in wages expense and $25,000 in miscellaneous expenses for 2020, with $20,000 on credit and the rest paid in cash. f. Collected accounts receivable, $34,000. g. Purchased other assets, $15,000 cash. h. Purchased supplies on account for future use, $27,000. i. Paid accounts payable, $26,000. j. Signed a three-year $33,000 service contract to start February 1, 2021. k. Declared cash dividends on December 1, $25,000, which were paid by December 31. (Hint: Prepare two entries.) Data for adjusting entries: 1. Supplies counted on December 31, 2020, $18,000. m. Depreciation for the year on the equipment, $10,000. n. Interest accrued on notes payable (to be computed). o. Wages earned by employees since the December 24 payroll but not yet paid, $16,000. p. Income tax expense, $11,000, payable in 2021. View transaction list View journal entry worksheet No Transaction General Journal Debit Credit 1 15,000 1,000 March 01, 2020 Cash Interest expense Long-term notes payable Interest payable 15.000 1,000 2 March 15, 2020 Land 13,000 Cash 13,000 3 163,000 August 30, 2020 Cash Accounts receivable Service revenue 52,000 215,000 4.000 January 01, 2020 Cash Common stock 4,000 5 89,000 25,000 October 15, 2020 Wages expense Miscellaneous expenses Cash Accounts payable 94.000 20,000 6 November 10, 2020 Cash 34,000 Accounts receivable 34,000 7 November 15, 2020 Other assets 15,000 Cash 15,000 December 01, 2020 27,000 Supplies Accounts payable 27,000 9 December 15, 2020 Accounts payable 26,000 Cash 26,000 10 December 17, 2020 No journal entry required 11 December 01 2020 25,000 Retained earnings Dividends payable 25,000 12 December 31, 2020 Dividends payable 25,000 Cash 25,000 13 December 31, 2020 22,000 Supplies expense Supplies 22,000 14 December 31, 2020 10,000 Depreciation expense Accumulated depreciation equipment 10,000 15 December 31, 2020 16,000 Wages expense Wages payable 16,000 16 December 31 2020 Income tax expense 11,000 Income taxes payable 11,000 Journal entry worksheet Record the closing entry. Note: Enter debits before credits. General Journal Debit Credit Transaction December 31, 2020 Record entry Clear entry View general journal