1. Prepare journal entries for transactions ( a ) through ( k ). (If no entry is
ID: 2574647 • Letter: 1
Question
1. Prepare journal entries for transactions (a) through (k). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Prepare the adjusting entries for transactions (l) through (p). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Brothers Mike and Tim Hargen began operations of their tool and die shop (H & H Tool, Inc) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2017, follows: Account Titles Credit Debit 0,000 9,000 8,000 Cash Accounts recelvable Supplies Land Equlpment Accumulated depreclation (on equipment) Other assets (not detalled to simplify) Accounts payable Wages payable Interest payable Income taxes payable Long-term notes payable Common stock (8,000 shares, S.50 par value) Additonal paid-in capltal Retained earnings Service revenue Depreclatlion expense Supples expense Wages expense Interest expense Income tax expense Remalning expenses (not detalled to simplify) 85.000 15,000 7.000 4.000 87000 23,000 Totals 129,000 129,000 Transactions during 2017 follow a. Borrowed $15,000 cash on a 5-year, 8 percent note payable, dated March 1, 2017 b. Purchased land for a future building site on March 15, 2017: paid cash, $18,000. c. Earned $271,000 in revenue. Transactions dated August 30, 2017, including $56,000 on credit and the rest in cash. d Sold 4,000 additional shares of capital stock for cash at $1 market value per share on January 1, 2017 e. Incurred $128,000 in remaining expenses for 2017, invoices dated October 15, 2017, including $27,000 on credit and the rest paid in cash. f. Collected accounts receivables on November 10, 2017, $41000 g. Purchased other assets on November 15, 2017, $18,000 cash. h. Purchased supplies on account for future use on December 1, 2017, $30.000. Paid accounts payable on December 15, 2017, $28,000. j Signed a three-year $36,000 service contract on December 17, 2017 to start February 1. 2018. k Declared and paid cash dividends on December 20, 2017, $28,000. Data for acjusting entries: L Supplies counted on December 31, 2017, $21.000. m Depreciation for the year on the equipment, $17,000. n Interest accrued on notes payable (to be computed). o. Wages earned by employees since the December 24 payroll but not yet paid, $20,000. p. Income tax expense, $16,000, payable in 2018.Explanation / Answer
Required journal entries are as prepared below:
Date Particulars L.F Amount ($) Amount ($) a. Mar-01 Cash 15,000 8% Note Payable 15,000 (For cash borrowed) b. Mar-15 Land 18,000 Cash 18,000 (For land purchased) c. Aug-30 Cash 215,000 Account Receivable 56,000 Revenue 271,000 (For revenue earned) d. Jan-01 Cash 4,000 Common stock 4,000 (for shares sold) e. Oct-15 Operating Exp 128,000 Cash 101,000 Account payable 27,000 (For expenses incurred) f. Nov-10 Cash 41,000 Account Receivable 41,000 (For cash collected) g. Nov-15 Other assets 18,000 Cash 18,000 (for assets purc) h. Dec-01 Supplies 30,000 Account Payable 30,000 (For supplies purchased on account) i. Dec-15 Account Payable 28,000 cash 28,000 (For paid to AP) j. Dec-17 No entry k. Dec-20 Cash dividend 28,000 Cash 28,000 (for dividend declared and paid) Adjusting entries l. Dec-31 Supplies Exp (18,000+30,000-21,000) 27,000 Supplies 27,000 (For supplies expensed) m. Dec-31 Depreciation 17,000 Accumulated dep 17,000 (for equipment depreciated) n. Dec-31 Interest Expense (15,000*8%*10/12) 1,000 Interest payable 1,000 (for interest accrued) o. Dec-31 Wages Exp 20,000 Wages payable 20,000 (for wages earned) p. Dec-31 Income tax expense 16,000 Income tax payable 16,000 (For income tax expense accrued)Related Questions
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