Question

Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, 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		69
Accumulated Depreciation				$	6
Software		24
Accumulated Amortization					4
Accounts Payable					5
Notes Payable (short-term)					0
Salaries and Wages Payable					0
Interest Payable					0
Income Tax Payable					0
Common Stock					90
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	$	113		$	113

Transactions and events during 2018 (summarized in thousands of dollars) follow:

Borrowed $12 cash on March 1 using a short-term note.

Purchased land on March 2 for future building site; paid cash, $9.

Issued additional shares of common stock on April 3 for $23.

Purchased software on July 4, $10 cash.

Purchased supplies on account on October 5 for future use, $18.

Paid accounts payable on November 6, $13.

Signed a $25 service contract on November 7 to start February 1, 2019.

Recorded revenues of $178 on December 8, including $49 on credit and $129 collected in cash.

Recognized salaries and wages expense on December 9, $94 paid in cash.

Collected accounts receivable on December 10, $33.

Data for adjusting journal entries as of December 31:

Unrecorded amortization for the year on software, $4.

Supplies counted on December 31, 2018, $10.

Depreciation for the year on the equipment, $6.

Interest of $1 to accrue on notes payable.

Salaries and wages earned but not yet paid or recorded, $12.

Income tax for the year was $8. It will be paid in 2019.

1, 3, 5 and 8. Set up T-accounts for the accounts on the trial balance. Enter beginning balances and post the transactions (a)-(j), adjusting entries (k)-(p), and closing entry. (Enter your answers in thousands of dollars.)

Answer 1

	Journal Entries
Date	Account Titles	Debit	Credit
1-Mar	Cash	$12
	Short term note payable		$12
2-Mar	Land	$9
	Cash		$9
3-Apr	Cash	$23
	Common Stock		$23
4-Jul	Software	$10
	Cash		$10
5-Oct	Supplies	$18
	Accounts payable		$18
6-Nov	Accounts payable	$13
	Cash		$13
7-Nov	No Entry required
8-Dec	Cash	$129
	Accounts receivables	$49
	Service Revenue		$178
9-Dec	Salaries and wages expenses	$94
	Cash		$94
10-Dec	Cash	$33
	Accounts Receivable		$33