Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Incorporated) on January 1, 2020. The annual reporting period ends December 31. The trial balance on January 1, 2021, follows (the amounts are rounded to thousands of dollars to simplify): Account Titles Debit Credit Cash $ 3 Accounts Receivable 5 Supplies 12 Land 0 Equipment 63 Accumulated Depreciation $ 6 Software 18 Accumulated Amortization 8 Accounts Payable 5 Notes Payable (short-term) 0 Salaries and Wages Payable 0 Interest Payable 0 Income Tax Payable 0 Common Stock 74 Retained Earnings 8 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 $ 101 $ 101 Transactions and events during 2021 (summarized in thousands of dollars) follow: Borrowed $12 cash on March 1 using a short-term note. Purchased land on March 2 for future building site; paid cash, $9. Issued additional shares of common stock on April 3 for $26. Purchased software on July 4, $10 cash. Purchased supplies on account on October 5 for future use, $18. Paid accounts payable on November 6, $13. Signed a $25 service contract on November 7 to start February 1, 2022. Recorded revenues of $166 on December 8, including $43 on credit and $123 collected in cash. Recognized salaries and wages expense on December 9, $88 paid in cash. Collected accounts receivable on December 10, $27. Data for adjusting journal entries as of December 31: Unrecorded amortization for the year on software, $8. Supplies counted on December 31, 2021, $10. Depreciation for the year on the equipment, $6. Interest of $1 to accrue on notes payable. Salaries and wages earned but not yet paid or recorded, $12. Income tax for the year was $8. It will be paid in 2022. Required: T accounts. Enter beginning balances and post journal entries from Part 2, the adjusting journal entries from Part 4, and the closing entry from Part 7.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Incorporated) on January 1, 2020. The annual reporting period ends December 31. The trial balance on January 1, 2021, follows (the amounts are rounded to thousands of dollars to simplify):

 

Account Titles Debit Credit
Cash $ 3  
Accounts Receivable 5  
Supplies 12  
Land 0  
Equipment 63  
Accumulated Depreciation   $ 6
Software 18  
Accumulated Amortization   8
Accounts Payable   5
Notes Payable (short-term)   0
Salaries and Wages Payable   0
Interest Payable   0
Income Tax Payable   0
Common Stock   74
Retained Earnings   8
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 $ 101 $ 101

 

Transactions and events during 2021 (summarized in thousands of dollars) follow:

  1. Borrowed $12 cash on March 1 using a short-term note.
  2. Purchased land on March 2 for future building site; paid cash, $9.
  3. Issued additional shares of common stock on April 3 for $26.
  4. Purchased software on July 4, $10 cash.
  5. Purchased supplies on account on October 5 for future use, $18.
  6. Paid accounts payable on November 6, $13.
  7. Signed a $25 service contract on November 7 to start February 1, 2022.
  8. Recorded revenues of $166 on December 8, including $43 on credit and $123 collected in cash.
  9. Recognized salaries and wages expense on December 9, $88 paid in cash.
  10. Collected accounts receivable on December 10, $27.

Data for adjusting journal entries as of December 31:

  1. Unrecorded amortization for the year on software, $8.
  2. Supplies counted on December 31, 2021, $10.
  3. Depreciation for the year on the equipment, $6.
  4. Interest of $1 to accrue on notes payable.
  5. Salaries and wages earned but not yet paid or recorded, $12.
  6. Income tax for the year was $8. It will be paid in 2022.

 

Required:

T accounts. Enter beginning balances and post journal entries from Part 2, the adjusting journal entries from Part 4, and the closing entry from Part 7.
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