Transcribed Image Text
In: AccountingC4-2 From Recording Transactions (Including Adjusting JournalEntries) to Preparing Financial Statements and Closing JournalEntries...C4-2 From Recording Transactions (Including Adjusting JournalEntries) to Preparing Financial Statements and Closing JournalEntries (Chapters 2, 3, and 4) [LO 2-3, LO 3-3, LO 4-1, LO 4-2, LO4-3, LO 4-4, LO 4-5, LO 4-6][The following information applies to the questionsdisplayed below.]Brothers Harry and HermanHausyerday began operations of their machine shop (H & H Tool,Inc.) on January 1, 2013. The annual reporting period ends December31. The trial balance on January 1, 2015, follows (the amounts arerounded to thousands of dollars to simplify): Account TitlesDebitCredit Cash$4 AccountsReceivable4 Supplies11 Land0 Equipment50 AccumulatedDepreciation$7 Software23 AccumulatedAmortization5 AccountsPayable6 Notes Payable(short-term)0 Salaries and WagesPayable0 InterestPayable0 Income TaxPayable0 Common Stock67 RetainedEarnings7 Service Revenue0 Salaries and WagesExpense0 DepreciationExpense0 AmortizationExpense0 Income TaxExpense0 InterestExpense0 SuppliesExpense0 Totals$92$92Transactions during2015 (summarized in thousands of dollars) follow:1.Borrowed $13 cash on a six-monthnote payable dated March 1, 2015.2.Purchased land for futurebuilding site; paid cash, $7.3.Earned revenues for 2015, $140,including $30 on credit and $110 collected in cash.4.Issued additional shares ofstock for $2.5.Recognized salaries and wagesexpense for 2015, $75 paid in cash.6.Collected accounts receivable,$14.7.Purchased software, $12cash.8.Paid accounts payable, $14.9.Purchased supplies on accountfor future use, $17.10.Signed a $30 service contract tostart February 1, 2016.Data for adjustingjournal entries:11.Unrecorded amortization for theyear on software, $5.12.Supplies counted on December 31,2015, $11.13.Depreciation for the year on theequipment, $7.14.Accrued interest of $2 on notespayable.15.Salaries and wages earned butnot yet paid or recorded, $13.16.Income tax for the year was $9.It will be paid in 2016.ReferencesSection BreakC4-2 From Recording Transactions(Including Adjusting Journal Entries) to Preparing FinancialStatements and Closing Journal Entries (Chapters 2, 3, and 4) [LO2-3, LO 3-3, LO 4-1, LO 4-2, LO 4-3, LO 4-4, LO 4-5, LO 4-6]1.value:1.11 pointsRequired informationC4-2 Part 2Required: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 youranswers in thousands of dollars.)ReferenceseBook & ResourcesGeneral JournalLearning Objective: 04-01Explain why adjustments are needed.Learning Objective: 04-04Prepare financial statements.C4-2 Part 2Learning Objective: 04-02 Prepareadjustments needed at the end of the period.Learning Objective:04-05 Explain the closing process.Difficulty: 3 HardLearning Objective: 04-03Prepare an adjusted trial balance.Learning Objective: 04-06 Explainhow adjustments affect financial results.Check my work2.value:1.11 pointsRequired informationC4-2 Part 3, 5, and 83, 5 and 8.Set up T-accounts for the accounts on the trial balance. Enterbeginning balances and post the transactions 1-10, adjustingentries 11-16, and closing entry. (Enter your answers inthousands of dollars.)ReferenceseBook & ResourcesWorksheetLearning Objective: 04-01 Explain whyadjustments are needed.Learning Objective: 04-04 Prepare financialstatements.C4-2 Part 3, 5, and 8Learning Objective: 04-02Prepare adjustments needed at the end of the period.LearningObjective: 04-05 Explain the closing process.Difficulty: 3 HardLearning Objective: 04-03Prepare an adjusted trial balance.Learning Objective: 04-06 Explainhow adjustments affect financial results.Check my work3.value:1.11 pointsRequired informationC4-2 Part 33.Post the journal entries from requirement 2 to T-accounts andprepare an unadjusted trial balance. (Enter your answers inthousands of dollars.)ReferenceseBook & ResourcesWorksheetLearning Objective: 04-01 Explain whyadjustments are needed.Learning Objective: 04-04 Prepare financialstatements.C4-2 Part 3Learning Objective: 04-02 Prepareadjustments needed at the end of the period.Learning Objective:04-05 Explain the closing process.Difficulty: 3 HardLearning Objective: 04-03Prepare an adjusted trial balance.Learning Objective: 04-06 Explainhow adjustments affect financial results.Check my work4.value:1.11 pointsRequired informationC4-2 Part 44.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 youranswers in thousands of dollars.)ReferenceseBook & ResourcesGeneral JournalLearning Objective: 04-01Explain why adjustments are needed.Learning Objective: 04-04Prepare financial statements.C4-2 Part 4Learning Objective: 04-02 Prepareadjustments needed at the end of the period.Learning Objective:04-05 Explain the closing process.Difficulty: 3 HardLearning Objective: 04-03Prepare an adjusted trial balance.Learning Objective: 04-06 Explainhow adjustments affect financial results.Check my work5.value:1.11 pointsRequired informationC4-2 Part 55.Post the adjusting entries from requirement 4 and prepare anadjusted trial balance. (Enter your answers in thousands ofdollars.)ReferenceseBook & ResourcesWorksheetLearning Objective: 04-01 Explain whyadjustments are needed.Learning Objective: 04-04 Prepare financialstatements.C4-2 Part 5Learning Objective: 04-02 Prepareadjustments needed at the end of the period.Learning Objective:04-05 Explain the closing process.Difficulty: 3 HardLearning Objective: 04-03Prepare an adjusted trial balance.Learning Objective: 04-06 Explainhow adjustments affect financial results.Check my work6.value:1.11 pointsRequired informationC4-2 Part 66.aPrepare an incomestatement. 6.bPrepare a statement ofretained earnings. 6.cPrepare balance sheet. (Amounts to be deducted should beindicated by a minus sign.) ReferenceseBook & ResourcesFinancial StatementsLearning Objective: 04-01Explain why adjustments are needed.Learning Objective: 04-04Prepare financial statements.C4-2 Part 6Learning Objective: 04-02 Prepareadjustments needed at the end of the period.Learning Objective:04-05 Explain the closing process.Difficulty: 3 HardLearning Objective: 04-03Prepare an adjusted trial balance.Learning Objective: 04-06 Explainhow adjustments affect financial results.Check my work7.value:1.11 pointsRequired informationC4-2 Part 77.Prepare the closing journal entry. (If no entry isrequired for a transaction/event, select "No Journal EntryRequired" in the first account field. Enter your answers inthousands of dollars.)ReferenceseBook & ResourcesGeneral JournalLearning Objective: 04-01Explain why adjustments are needed.Learning Objective: 04-04Prepare financial statements.C4-2 Part 7Learning Objective: 04-02 Prepareadjustments needed at the end of the period.Learning Objective:04-05 Explain the closing process.Difficulty: 3 HardLearning Objective: 04-03Prepare an adjusted trial balance.Learning Objective: 04-06 Explainhow adjustments affect financial results.Check my work8.value:1.11 pointsRequired informationC4-2 Part 88.Post the closing entry from requirement 7 and prepare apost-closing trial balance. (Enter your answers inthousands of dollars.)ReferenceseBook & ResourcesWorksheetLearning Objective: 04-01 Explain whyadjustments are needed.Learning Objective: 04-04 Prepare financialstatements.C4-2 Part 8Learning Objective: 04-02 Prepareadjustments needed at the end of the period.Learning Objective:04-05 Explain the closing process.Difficulty: 3 HardLearning Objective: 04-03Prepare an adjusted trial balance.Learning Objective: 04-06 Explainhow adjustments affect financial results.Check my work9.value:1.12 pointsRequired informationC4-2 Part 99-a.How much net income did H & H Tool, Inc., generate during2015? What was its net profit margin? (Enter "Net Income"in thousands of dollars. Round "Net Profit Profit" to 2 decimalplaces.)9-b.Is the companyfinanced primarily by liabilities or stockholders’ equity?Stockholders' EquityLiabilities9-c.What is its current ratio? (Enter your answers inthousands of dollars.)