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 $ 2 Accounts Receivable 6 Supplies 13 Land 0 Equipment 54 Accumulated Depreciation $ 5 Software 21 Accumulated Amortization 6 Accounts Payable 4 Notes Payable (short-term) 0 Salaries and Wages Payable 0 Interest Payable 0 Income Tax Payable 0 Common Stock 72 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 $ 96 $ 96 Transactions and events during 2021 (summarized in thousands of dollars) follow: Borrowed $11 cash on March 1 using a short-term note. Purchased land on March 2 for future building site; paid cash, $8. Issued additional shares of common stock on April 3 for $30. Purchased software on July 4, $11 cash. Purchased supplies on account on October 5 for future use, $19. Paid accounts payable on November 6, $12. Signed a $20 service contract on November 7 to start February 1, 2022. Recorded revenues of $148 on December 8, including $34 on credit and $114 collected in cash. Recognized salaries and wages expense on December 9, $79 paid in cash. Collected accounts receivable on December 10, $18. Data for adjusting journal entries as of December 31: Unrecorded amortization for the year on software, $6. Supplies counted on December 31, 2021, $12. Depreciation for the year on the equipment, $5. Interest of $1 to accrue on notes payable. Salaries and wages earned but not yet paid or recorded, $11. Income tax for the year was $7. It will be paid in 2022.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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C4-2 (Algo) From Recording Transactions (Including Adjusting Journal Entries) to Preparing Financial Statements and Closing Journal Entries (Chapters 2, 3, and 4) [LO 2-3, LO 3-3, LO 4-1, LO 4-2, LO 4-3, LO 4-4, LO 4-5, LO 4-6]

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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	$ 2
Accounts Receivable	6
Supplies	13
Land	0
Equipment	54
Accumulated Depreciation		$ 5
Software	21
Accumulated Amortization		6
Accounts Payable		4
Notes Payable (short-term)		0
Salaries and Wages Payable		0
Interest Payable		0
Income Tax Payable		0
Common Stock		72
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	$ 96	$ 96

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

Borrowed $11 cash on March 1 using a short-term note.
Purchased land on March 2 for future building site; paid cash, $8.
Issued additional shares of common stock on April 3 for $30.
Purchased software on July 4, $11 cash.
Purchased supplies on account on October 5 for future use, $19.
Paid accounts payable on November 6, $12.
Signed a $20 service contract on November 7 to start February 1, 2022.
Recorded revenues of $148 on December 8, including $34 on credit and $114 collected in cash.
Recognized salaries and wages expense on December 9, $79 paid in cash.
Collected accounts receivable on December 10, $18.

Data for adjusting journal entries as of December 31:

Unrecorded amortization for the year on software, $6.
Supplies counted on December 31, 2021, $12.
Depreciation for the year on the equipment, $5.
Interest of $1 to accrue on notes payable.
Salaries and wages earned but not yet paid or recorded, $11.
Income tax for the year was $7. It will be paid in 2022.

C4-2 (Algo) T accounts

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. (Enter your answers in thousands of dollars.)

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C4-2 (Algo) From Recording Transactions (Including Adjusting Journal Entries) to Preparing Financial Statements and Closing Journal Entries (Chapters 2, 3, and 4) [LO 2-3, LO 3-3, LO 4-1, LO 4-2, LO 4-3, LO 4-4, LO 4-5, LO 4-6]

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Account Titles	Debit	Credit
Cash	$ 2
Accounts Receivable	6
Supplies	13
Land	0
Equipment	54
Accumulated Depreciation		$ 5
Software	21
Accumulated Amortization		6
Accounts Payable		4
Notes Payable (short-term)		0
Salaries and Wages Payable		0
Interest Payable		0
Income Tax Payable		0
Common Stock		72
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	$ 96	$ 96

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

Borrowed $11 cash on March 1 using a short-term note.
Purchased land on March 2 for future building site; paid cash, $8.
Issued additional shares of common stock on April 3 for $30.
Purchased software on July 4, $11 cash.
Purchased supplies on account on October 5 for future use, $19.
Paid accounts payable on November 6, $12.
Signed a $20 service contract on November 7 to start February 1, 2022.
Recorded revenues of $148 on December 8, including $34 on credit and $114 collected in cash.
Recognized salaries and wages expense on December 9, $79 paid in cash.
Collected accounts receivable on December 10, $18.

Data for adjusting journal entries as of December 31:

Unrecorded amortization for the year on software, $6.
Supplies counted on December 31, 2021, $12.
Depreciation for the year on the equipment, $5.
Interest of $1 to accrue on notes payable.
Salaries and wages earned but not yet paid or recorded, $11.
Income tax for the year was $7. It will be paid in 2022.

C4-2 (Algo) Part 7

Required:

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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