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COMP4-1 Recording Transactions (Including Adjusting and Closing Entries), Preparing a Complete Set of Financial Statements, and Performing Ratio Analysis LO1, 2, 3, 4, 5

Brothers Mike and Tim Hargen began operations of their tool and die shop (H & H Tool, Inc.) on January 1, 2011. The annual reporting period ends December 31. The trial balance on January 1, 2012, follows:

Account Titles	Debit		Credit
Cash	$	4,000
Accounts receivable		7,000
Supplies		16,000
Land
Equipment		78,000
Accumulated depreciation (on equipment)			$	8,000
Other assets (not detailed to simplify)		5,000
Accounts payable
Wages payable
Interest payable
Income taxes payable
Long-term notes payable
Contributed capital (85,000 shares)				85,000
Retained earnings				17,000
Service revenue
Depreciation expense
Supplies expense
Wages expense
Interest expense
Income tax expense
Remaining expenses (not detailed to simplify)
Totals	$	110,000	$	110,000

Transactions during 2012 follow:
a.	Borrowed $12,000 cash on a five-year, 10 percent note payable, dated March 1, 2012.
b.	Purchased land for a future building site; paid cash, $12,000.
c.	Earned $208,000 in revenues for 2012, including $52,000 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, 2012.
e.	Incurred $111,000 in Remaining Expenses for 2012, including $20,000 on credit and the rest paid in cash.
f.	Collected accounts receivable, $34,000.
g.	Purchased other assets, $13,000 cash.
h.	Paid accounts payable, $19,000.
i.	Purchased supplies on account for future use, $23,000.
j.	Signed a three-year $33,000 service contract to start February 1, 2013.
k.	Declared and paid cash dividends, $22,000.
Data for adjusting entries:
l.	Supplies counted on December 31, 2012, $18,000.
m.	Depreciation for the year on the equipment, $8,000.
n.	Interest accrued on notes payable (to be computed).
o.	Wages earned by employees since the December 24 payroll but not yet paid, $16,000.
p.	Income tax expense, $10,000, payable in 2013.

Required:
1.	Prepare T-accounts for the accounts on the trial balance and enter the beginning balances from the trial balance into the respective T-accounts.

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