Brothers Harry and Herman Hausyerday began operations of their machine shop (H &

Question

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):

1. Record Journal entries for 1-10.

2. Set up T accounts for the accounts on the trial balance. include beginning balances, transactions 1-10, adjusting entries 11-16, and closing entry for these following accounts: cash, accounts receivable, supplies, land, equipment, accumulated depreciation, software, accumulated amortization, accounts payable, note payable, salaries and wages payable, interest payable, income tax payable, common stock, retained earnings, service revenue, depreciation expense, amortization expense, income tax expense, interest expense, salaries and wages expense, supplies expense

3. prepare an unadjusted trial balance

4. record adjusting journal entries 11-16

5. post adjusting entries from #4, and prepare an adjusted trial balance

6a. prepare an income statement

6b. prepare statement of retained earnings

6c. prepare balance sheet

7. prepare closing journal entry - record entry to close revenue and expense accounts to retain earnings

8. post closing entry from #7 and prepare a post-closing trial balance

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):

Explanation / Answer

Since, there are multiple parts to the question, I have answered 1, 2, 3, 4 and 7 (as T-Accounts can be setup only after the closing entry has been prepared and accounted for). Part 5 is also completed partially as the adjusting entries have been posted to T-Accounts in Part 2.

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Part 1)

The journal entries are provided as below:

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Part 2)

The T-Accounts are set up as below:

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Part 3)

The unadjusted trial balance is prepared as follows:

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Part 4)

The adjusting entries are prepared as follows:

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Part 7)

The closing entry is given as below:

Transaction Account Titles Debit Credit 1 Cash $12 Notes Payable (Short Term) $12 2 Land $9 Cash $9 3 Cash $120 Accounts Receivable $40 Service Revenue $160 4 Cash $3 Common Stock $3 5 Salaries and Wages Expense $85 Cash $85 6 Cash $24 Accounts Receivable $24 7 Software $10 Cash $10 8 Accounts Payable $13 Cash $13 9 Supplies $18 Accounts Payable $18 10 No Journal Entry Required

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