C4–2 (continued)
Req. 1, 3, 5, and 8 (T–accounts)
Service
Revenue (R)
Depreciation
Expense (E)
Amortization Expense
(E)
Beg. 0
12/8 160
Beg. 0
12/31(13) 6
Beg. 0
12/31(11) 5
CE1 160
CE1 6
CE1 5
Bal. 0
Bal. 0
Bal. 0
Income Tax
Expense (E)
Interest
Expense (E)
Salaries and Wages
Expense (E)
Beg. 0
12/31(16) 8
Beg. 0
12/31(14) 1
Beg. 0
12/9 85
12/31(15) 12
97
CE1 8
CE1 1
CE1 97
Bal. 0
Bal. 0
Bal. 0
Supplies Expense
(E)
Beg. 0
12/31(12) 20
CE1
20
Bal. 0
C4–2 (continued)
Req. 2
1.
Cash (+A) ………………………………………………………
12
Notes Payable (short–term) (+L) ……………….
12
Borrowed cash on note.
2.
Land (+A) ……………………………………………………….
9
Cash (−A) ………………………………………………
9
Purchased land for future building site.
3.
Cash (+A) ………………………………………………………
23
Common Stock (+SE) …………………………..…
23
Issued common stock for cash.
4.
Software (+A) …………………………………………………..
10
Cash (−A) ……………………………………………….
10
Purchased additional software.
5.
Supplies (+A) ………………………………………………….
18
Accounts Payable (+L) …………………………….
18
Purchased supplies for future use.
6.
Accounts Payable (−L) ……………………………………..
13
Cash (−A) ……………………………………………….
13
Paid creditors.
7.
No entry required; no revenue earned in 2015.
8.
Cash (+A) ………………………………………………………
120
Accounts Receivable (+A) …………………………………
40
Service Revenue (+R, +SE) ……………………..
160
Service revenues earned during 2015.
9.
Salaries and Wages Expense (+E, −SE)
85
Cash (−A) …………………………..………………….
85
Salaries and Wages Expense incurred during 2015.
10.
Cash (+A) ………………………………………………………
24
Accounts Receivable (−A) ………………………..
24
Collected on customers’ accounts.
C4–2 (continued)
Req. 3 H & H TOOL, INC.
Unadjusted Trial Balance
At December 31, 2015
(in thousands)
C4–2 (continued)
Req. 4
11.
Amortization Expense (+E, –SE) …………………………...
5
Accumulated Amort (+xA, −A). ……………………..
5
To record amortization as given.
12.
Supplies Expense (+E, −SE) ………………………………..
20
Supplies (−A) ……………………………………………..
20
To record supplies used ($12 + $18 − $10).
13.
Depreciation Expense (+E, −SE) …………………………..
6
Accum. Depn–Equip. (+xA, −A) …………………….
6
To record depreciation as given.
14.
Interest Expense (+E, −SE) ………………………………….
1
Interest Payable (+L) ……………………………………
1
To accrue interest for March – December, 2015.
15.
Salaries and Wages Expense (+E, −SE) ………………..
12
Salaries and Wages Payable (+L) …………………
12
To accrue wages incurred but not paid.
16.
Income Tax Expense (+E, −SE) …………………………...
8
Income Tax Payable (+L) …………………………….
8
To accrue income tax.
C4–2 (continued)
Req. 5 H & H TOOL, INC.
Adjusted Trial Balance
At December 31, 2015
(in thousands)
C4–2 (continued)
Req. 6 H & H TOOL, INC.
Income Statement
For the Year Ended December 31, 2015
(in thousands)
Revenues:
Service Revenue
$ 160
Expenses:
Salaries and Wages Expense
97
Supplies Expense
20
Depreciation Expense
6
Amortization Expense
5
Interest Expense
1
Income Tax Expense
8
Total Expenses
137
Net Income
$ 23
H & H TOOL, INC.
Statement of Retained Earnings
For the Year Ended December 31, 2015
(in thousands)
Balance, January 1, 2015
$ 8
Add: Net Income
23
Subtract: Dividends
(0)
Balance, December 31, 2015
$ 31
C4–2 (continued)
Req. 6 (continued)
H & H TOOL, INC.
Balance Sheet
At December 31, 2015
C4–2 (continued)
Req. 7
Service Revenue (−R) …………………………..…………
160
Salaries and Wages Expense (−E) ……………
97
Supplies Expense (−E) …………………………...
20
Depreciation Expense (−E) ………………………
6
Amortization Expense (–E)
5
Income Tax Expense (−E) ……………………….
8
Interest Expense (−E) ……………………………..
1
Retained Earnings (+SE) …………………………
23
Req. 8 H & H TOOL, INC.
Post–Closing Trial Balance
At December 31, 2015
(in thousands)
Account Titles
Debit
Credit
Cash
$ 65
Accounts Receivable
21
Supplies
10
Land
9
Equipment
60
Accumulated Depreciation–Equipment
$ 12
Software
25
Accumulated Amortization
10
Accounts Payable
10
Notes Payable (short–term)
12
Salaries and Wages Payable
12
Interest Payable
1
Income Tax Payable
8
Common Stock
94
Retained Earnings
31
Dividends
0
Service Revenue
0
Salaries and Wages Expense
0
Supplies Expense
0
Depreciation Expense
0
Amortization Expense
0
Interest Expense
0
Income Tax Expense
0
Total
$ 190
$ 190
C4–2 (continued)
Req. 9
H&H Tool, Inc., generated net income of $23 (thousand) during 2015. This represents a
C4–3
Req. 1, 3, 5, and 8 (T–accounts)
Cash (A)
Accounts
Receivable (A)
Supplies (A)
Bal. 7
7/2 25
Bal. 3
Bal. 3
7/1 22
7/4 3
12/6 8
7/5 7
7/3 5
12/7 30
12/8 9
10
12/6 47
12/9 10
12/31(12) 7
12/8 9
12/10 3
Bal. 25
Bal. 2
Bal. 3
Bal. 8
Bal. 1
12/31(13) 4
Bal. 33
Bal. 5
Bal. 5
Bal. 1
7/4 3
Bal. 2
Bal. 5
Bal. 0
Bal. 0
12/9 10
7/1 22
12/31(15) 3
Bal. 22
Bal. 3
12/10 3
Bal. 4
Bal. 3
C4–3 (continued)
Req. 1, 3, 5, and 8 (T–accounts continued)
Common Stock
(SE)
Retained
Earnings (SE)
Bal. 15
Bal. 4
7/3 5
CE1 5
Bal. 20
Bal. 9
Bal. 0
Bal. 0
Bal. 0
Bal. 0
Bal. 0
CE1 55
Bal. 0
Bal. 0