Question
[ The following information applies to the questions displayed below. ] Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H
[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, 2013. The annual reporting period ends December 31. The trial balance on January 1, 2015, 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 | 64 | |||||
Accumulated Depreciation | $ | 5 | ||||
Software | 18 | |||||
Accumulated Amortization | 4 | |||||
Accounts Payable | 4 | |||||
Notes Payable (short-term) | 0 | |||||
Salaries and Wages Payable | 0 | |||||
Interest Payable | 0 | |||||
Income Tax Payable | 0 | |||||
Common Stock | 81 | |||||
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 | $ | 103 | $ | 103 | ||
Transactions during 2015 (summarized in thousands of dollars) follow: | |
1. | Borrowed $11 cash on a six-month note payable dated March 1, 2015. |
2. | Purchased land for future building site; paid cash, $8. |
3. | Earned revenues for 2015, $168, including $44 on credit and $124 collected in cash. |
4. | Issued additional shares of stock for $4. |
5. | Recognized salaries and wages expense for 2015, $89 paid in cash. |
6. | Collected accounts receivable, $28. |
7. | Purchased software, $11 cash. |
8. | Paid accounts payable, $12. |
9. | Purchased supplies on account for future use, $19. |
10. | Signed a $20 service contract to start February 1, 2016. |
Data for adjusting journal entries: | |
11. | Unrecorded amortization for the year on software, $4. |
12. | Supplies counted on December 31, 2015, $12. |
13. | Depreciation for the year on the equipment, $5. |
14. | Accrued interest of $1 on notes payable. |
15. | Salaries and wages earned but not yet paid or recorded, $13. |
16. | Income tax for the year was $7. It will be paid in 2016. |
Required: | |||||||||||||||||
2. | Record journal entries for transactions (1) through (10). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.)
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7. | Prepare the closing journal entry. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.) | |||||||||||||||||
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9-c. | What is its current ratio? (Enter your answers in thousands of dollars.) |
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