70.2K

Verified Solution

Link Copied!

Balance Sheet of H&H Tools, IncC$4-4$ From Recording Transactions $($Including Adjusting Journal Entries$)$ to Preparing Financial Statements and Closing Journal Entries $($Chapters $2,3,$ and $4)$

Alison and Chuck Renny began operations of their furniture repair shop $($Lazy Sofa Furniture, Inc.$)$ on January $1,2020.$ The annual reporting period ends December $31.$ The trial balance on January $1,2021,$ follows $($amounts are rounded to thousands of dollars to simplify$).$

$\backslash$table$[[$Account Titles,Debit,Credit$],[$Cash$,$$$5,],[$Accounts Receivable,$4,],[$Supplies$,2,$

Required:

$1.$ Set up T$-$accounts for the accounts on the trial balance and enter beginning balances. If you are completing this problem in Connect using the general ledger tool, this requirement will be completed for you.

$2.$ Record journal entries for transactions $($a$)$ through $($j$).$

$3.$ Post the journal entries from requirement $2$ to T$-$accounts and prepare an unadjusted trial

balance. If you are completing this problem in Connect using the general ledger tool, this requirement will be completed for you using your answers to requirement $2.$

$4.$ Record adjusting journal entries $($k$)$ through $($p$).$

$5.$ Post the adjusting entries from requirement $4$ and prepare an adjusted trial balance. If you are

completing this problem in Connect using the general ledger tool, this requirement will be completed for you using your previous answers.

$6.$ Prepare an income statement, statement of retained earnings, and balance sheet.

$7.$ Prepare the closing journal entry.

$8.$ Post the closing entry from requirement $7$ and prepare a post$-$closing trial balance. If you are

completing this problem in Connect using the general ledger tool, this requirement will be completed for you using your previous answers.

$9.$ How much net income did Lazy Sofa Furniture, Inc., generate during $2021?$ Is the company financed primarily by liabilities or stockholders$$ equity?

Answer & Explanation Solved by verified expert

See Answer