Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Incorporated) on January 1, 2020. The annual reporting period ends December 31. The trial balance on January 1, 2021, follows (the amounts are rounded to thousands of dollars to simplify):
Account Titles Debit Credit
Cash $ 3
Accounts Receivable 5
Supplies 12
Land 0
Equipment 60
Accumulated Depreciation $ 6
Software 15
Accumulated Amortization 5
Accounts Payable 5
Notes Payable (short-term) 0
Salaries and Wages Payable 0
Interest Payable 0
Income Tax Payable 0
Common Stock 71
Retained Earnings 8
Service Revenue 0
Salaries and Wages Expense 0
Depreciation Expense 0
Amortization Expense 0
Income Tax Expense 0
Interest Expense 0
Supplies Expense 0
Totals $ 95 $ 95
Transactions and events during 2021 (summarized in thousands of dollars) follow:
Borrowed $12 cash on March 1 using a short-term note.
Purchased land on March 2 for future building site; paid cash, $9.
Issued additional shares of common stock on April 3 for $23.
Purchased software on July 4, $10 cash.
Purchased supplies on account on October 5 for future use, $18.
Paid accounts payable on November 6, $13.
Signed a $25 service contract on November 7 to start February 1, 2022.
Recorded revenues of $160 on December 8, including $40 on credit and $120 collected in cash.
Recognized salaries and wages expense on December 9, $85 paid in cash.
Collected accounts receivable on December 10, $24.
Data for adjusting journal entries as of December 31:
Unrecorded amortization for the year on software, $5.
Supplies counted on December 31, 2021, $10.
Depreciation for the year on the equipment, $6.
Interest of $1 to accrue on notes payable.
Salaries and wages earned but not yet paid or recorded, $12.
Income tax for the year was $8. It will be paid in 2022.
