Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool Co.) on January 1, 2010. The annual reporting period ends December 31. The trial balance on January 1, 2014, appears below (the amounts are rounded to thousands of dollars to simplify).

Transactions during 2014 (summarized in thousands of dollars) follow:
a. Borrowed $12 cash on a short-term note payable.
b. Purchased land for future building site, paid cash, $9.
c. Earned revenues for 2014, $160, including $40 on credit and $120 collected in cash. d. Issued additional shares for $3.
e. Recognized operating expenses for 2014, $85, including $15 on credit and $70 paid in cash.
f. Collected accounts receivable, $24.
g. Purchased other assets, $10 cash.
h. Paid accounts payable, $13.
i. Purchased supplies on account for future use, $18.
j. Signed a $25 service contract to start February 1, 2015.
k. Declared and paid a cash dividend, $17. Data for adjusting journal entries:
l. Supplies counted on December 31, 2014, $10.
m. Depreciation for the year on the equipment, $6.
n. Accrued interest on notes payable of $1.
o. Wages earned since the December 24 payroll not yet paid, $12.
p. Income tax for the year was $8. It will be paid in 2015.
Required
1. Set up T-accounts for the accounts on the trial balance and enter beginning balances.
2. Record journal entries for transactions (a) through (k), and post them to the T-accounts?
3. Prepare an unadjusted trial balance.
4. Record and post the adjusting journal entries (l) through (p).
5. Prepare an adjusted trial balance.
6. Prepare an income statement, statement of retained earnings, and balance sheet.
7. Prepare and post the closing journal entries. 8. Prepare a post-closing trial balance.
9. How much net income did H & H Tool Co. generate during 2014? Is the company financed primarily by liabilities or shareholders' equity?

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Account Titles Debit Credit Cash Accounts Receivable Supplies 12 Land Equipment 60 Accumulated Depreciation (on Equipment) Other Assets Accounts Payable Notes Payable Wages Payable Interest Payable Income Tax Payable Contributed Capital 65 Retained Earnings Dividends Declored Service Rovenue Depreciation Expense Income Tax Expense Interest Expense Supplies and Operating Expenses Totals $84 $84 |미0101이1 noololoin co %24