Required information [The following information applies to the questions displayed below.) Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (the amounts are rounded to thousands of dollars to simplify): Debit Credit $ 2 6 13 0 51 $ 5 24 4 Account Titles Cash Accounts Receivable Supplies Land Equipment Accumulated Depreciation Software Accumulated Amortization Accounts Payable Notes Payable (short-term) Salaries and Wages Payable Interest Payable Income Tax Payable Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Depreciation Expense Amortization Expense Income Tax Expense Interest Expense Supplies Expense Totals 4 0 0 0 0 74 9 0 0 0 0 0 0 0 $ 96 $ 96 Transactions and events during 2018 (summarized in thousands of dollars) follow: a. Borrowed $11 cash on March 1 using a short-term note. b. Purchased land on March 2 for future building site; paid cash, $8. c. Issued additional shares of common stock on April 3 for $33. d. Purchased software on July 4, $11 cash. e. Purchased supplies on account on October 5 for future use, $19. f. Paid accounts payable on November 6, $12. g. Signed a $20 service contract on November 7 to start February 1, 2019. h. Recorded revenues of $142 on December 8, including $31 on credit and $111 collected in cash. i. Recognized salaries and wages expense on December 9, $76 paid in cash. j. Collected accounts receivable on December 10, $15. Data for adjusting journal entries as of December 31: k. Unrecorded amortization for the year on software, $4. 1. Supplies counted on December 31, 2018, $12. m. Depreciation for the year on the equipment, $5. n. Interest of $1 to accrue on notes payable. o. Salaries and wages earned but not yet paid or recorded, $11. p. Income tax for the year was $7. It will be paid in 2019. 6-a. Prepare an income statement. 6-b. Prepare the statement of retained earnings. 6-c. Prepare the balance sheet. Req 6A Req 6B Req 6C Prepare an income statement. (Enter your answers in thousands of dollars.) H & H TOOL, INC. Income Statement For the Year Ended December 31, 2018 (in thousands) Revenues Service Revenue $ 142 Total Revenues 142 87 5 Expenses Salaries and Wages Expense Depreciation Expense Amortization Expense Income Tax Expense Interest Expense Supplies Expense 4 7 1 20 Total Expenses 124 Net Income $ 18 X Answer is not complete. Complete this question by entering your answers in the tabs below. Req 6A Req 6B Req 6C Prepare the statement of retained earnings. (Enter your answers in thousands of dollars.) H & H TOOL, INC. Statement of Retained Earnings For the Year Ended December 31, 2018 (in thousands) Balance, January 1, 2018 $ 9 Add: Net Income 18 Balance, December 31, 2018 $ 27 H & H TOOL, INC. Balance Sheet At December 31, 2018 (in thousands) Assets Liabilities Current Assets Current Liabilities Cash $ 65 11 Accounts Receivable 22 11 Supplies 12 Accounts Payable Notes Payable (short-term) Salaries and Wages Payable Interest Payable Income Tax Payable 11 1 7 Total Current Assets 99 Total Current Liabilities 41 Land 8 Stockholders' Equity $ 51 Common Stock $ 107 Equipment Accumulated Depreciation (10) 41 Retained Earnings 27 Software 35 Accumulated Amortization (8) 27 134 Total Stockholders' Equity Total Liabilities and Stockholders' Equity Total Assets $ 175 $ 175
