2. Record all Journal Entries for transactions 1-10. 3. Post the journal entries

Question

2. Record all Journal Entries for transactions 1-10.

3. Post the journal entries from requirement 2 to T-accounts and prepare an unadjusted trial balance.

4. Record the adjusting journal entries (11) through (16).

5. Post the adjusting entries from requirement 4 and prepare an adjusted trial balance.

6 a. Prepare an income statement.

6 b. Prepare a statement of retained earnings.

6 c. Prepare balance sheet

7. Prepare the closing journal entry

8. Post the closing entry from requirement 7 and prepare a post-closing trial balance

9 a. How much net income did H & H Tool, Inc., generate during 2015? What was its net profit margin?

9b. What is its current ratio?

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 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 Debit Credit 59 $ 7 Totals $92 $92

Explanation / Answer

2.

4.

5.

6a.

6.b.

6.c.

7.

8.

9.a.

Net income = $21,000

Net profit margin = 13.29 % (21 * 100 /159)

9.b.

Current Ratio = Curent Asets / Curent Liabilities = $75 / $45 = 1.67

H & H Tool Inc. General journal for the year ending December 31, 2015 Date Account Title Debit Credit 1 Cash 13 Note Payable 13 (Borrowing on note payable) 2 Land 7 Cash 7 (Purchase of land) 3 Cash 119 Accounts Receivable 39 Service Revenue 158 (Service revenue for the year) 4 Cash 2 Common Stock 2 (Issue of common stock) 5 Salaries and wages expense 84 Cash 84 (Salaries and wages paid ) 6 Cash 23 Accounts Receivable 23 (Received cash on account) 7 Software 12 Cash 12 (Purchase of software for cash) 8 Accounts Payable 14 Cash 14 (Payment for accounts payable) 9 Supplies 17 Accounts Payable 17 (Purchase of supplies on account) 10 No entry required

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