C4-2 From Recording Transactions (Including Adjusting Journal Entries) to Prepar
ID: 2527743 • Letter: C
Question
C4-2 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]
[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
$
3
Accounts Receivable
5
Supplies
12
Land
0
Equipment
52
Accumulated Depreciation
$
6
Software
22
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
67
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
$
94
$
94
Transactions during 2015 (summarized in thousands of dollars) follow:
1.
Borrowed $12 cash on a six-month note payable dated March 1, 2015.
2.
Purchased land for future building site; paid cash, $9.
3.
Earned revenues for 2015, $144, including $32 on credit and $112 collected in cash.
4.
Issued additional shares of stock for $3.
5.
Recognized salaries and wages expense for 2015, $77 paid in cash.
6.
Collected accounts receivable, $16.
7.
Purchased software, $10 cash.
8.
Paid accounts payable, $13.
9.
Purchased supplies on account for future use, $18.
10.
Signed a $25 service contract to start February 1, 2016.
Data for adjusting journal entries:
11.
Unrecorded amortization for the year on software, $8.
12.
Supplies counted on December 31, 2015, $10.
13.
Depreciation for the year on the equipment, $6.
14.
Accrued interest of $1 on notes payable.
15.
Salaries and wages earned but not yet paid or recorded, $12.
16.
Income tax for the year was $8. 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.)
3, 5 and 8.
Set up T-accounts for the accounts on the trial balance. Enter beginning balances and post the transactions 1-10, adjusting entries 11-16, and closing entry. (Enter your answers in thousands of dollars.)
3.
Post the journal entries from requirement 2 to T-accounts and prepare an unadjusted trial balance. (Enter your answers in thousands of dollars.)
4.
Record the adjusting journal entries (11) through (16). (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.)
5.
Post the adjusting entries from requirement 4 and prepare an adjusted trial balance. (Enter your answers in thousands of dollars.)
6.a
Prepare an income statement.
6.b
Prepare a statement of retained earnings.
6.c
Prepare balance sheet. (Amounts to be deducted should be indicated by a minus sign.)
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.)
8.
Post the closing entry from requirement 7 and prepare a post-closing trial balance. (Enter your answers in thousands of dollars.)
9-a.
How much net income did H & H Tool, Inc., generate during 2015? What was its net profit margin? (Enter "Net Income" in thousands of dollars. Round "Net Profit Profit" to 2 decimal places.)
9-b.
Is the company financed primarily by liabilities or stockholders’ equity?
Stockholders' Equity
Liabilities
9-c.
What is its current ratio? (Enter your answers in thousands of dollars.)
[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):
Explanation / Answer
2. In the books of H & H Tools Inc. :
3. H & H Tools Inc.
Unadjusted Trial Balance
December 31, 2015
4. In the books of H & H Tools Inc.:
5. H & H Tools Inc.
Adjusted Trial Balance
December 31, 2015
6a. H & H Tools Inc.
Income Statement
For the year ended December 31, 2015
6b. H & H Tool Inc.
Statement of Retained Earnings
For the year ended December 31, 2015
6c. H & H Tools Inc.
Balance Sheet
December 31, 2015
Transaction / Event Account Titles Debit Credit 2015 $ $ 1. Cash 12 Note Payable 12 2. Land 9 Cash 9 3. Cash 112 Accounts Receivable 32 Service Revenue 144 4. Cash 3 Common Stock 3 5. Salaries and Wages Expense 77 Cash 77 6. Cash 16 Accounts Receivable 16 7. Software 10 Cash 10 8. Accounts Payable 13 Cash 13 9. Supplies 18 Accounts Payable 18 10. No journal entry required.Related Questions
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