Respuesta :
Answer:
H & H Tool, Inc.
1. Journal Entries:
a. Debit Cash $15,000
Credit Note Payable $15,000
To record the receipt of a 5-year, 8% note payable.
b. Debit Land $18,000
Credit Cash $18,000
To record the purchase of land.
c. Debit Cash $215,000
Debit Accounts Receivable $56,000
Credit Service Revenue $271,000
To record services revenue earned.
d. Debit Cash $4,000
Credit Common Stock $2,000
Credit Additional Capital $2,000
To record the issue of additional shares at $1 each.
e. Debit Remaining expenses $128,000
Credit Cash $101,000
Credit Accounts Payable $27,000
To record the expenses incurred.
f. Debit Cash $41,000
Credit Accounts Receivable $41,000
To record cash collection from customers.
g. Debit Other Assets $18,000
Credit Cash $18,000
To record the purchase of other assets.
h. Debit Supplies $30,000
Credit Accounts Payable $30,000
To record the purchase of supplies on account.
i. Debit Accounts Payable $28,000
Credit Cash $28,000
To record the payment on account.
j. No Journal Required
k. Debit Dividends $28,000
Credit Cash $28,000
To record the payment of dividends.
Adjusting entries:
m. Debit Supplies Expense $27,000
Credit Supplies $27,000
To record supplies used.
n. Debit Depreciation Expense - Equipment $17,000
Credit Accumulated Depreciation - Equipment $17,000
To record depreciation expense.
o. Debit Interest Expense $1,000
Credit Interest Payable $1,000
To record the accrued interest expense for the year.
p. Debit Wages Expense $20,000
Credit Wages Payable $20,000
To record accrued wages.
q. Debit Income Tax Expense $16,000
Credit Income Tax Payable $16,000
To record accrued income tax expense.
2. Income Statement as of December 31, 2017
Service revenue                        $271,000
Depreciation expense            17,000
Supplies expense               27,000
Wages expense                20,000
Interest expense                 1,000
Income tax expense             16,000
Remaining expenses
 (not detailed to simplify)        128,000
Total expenses                        $237,000
Net income                            $34,000
Retained earnings, January 1, 2017 Â Â Â Â $23,000
Net income                         34,000
Dividends                          28,000
Retained earnings, December 31, 2017 $29,000
3. Current Ratio = Current Assets/Current Liabilities
= $137,000/$66,000
= 2.08
Total asset turnover = Â Total Revenue/Total Assets
= $271,000/$208,000
= 1.3
Net Profit Margin = $34,000/$271,000 * 100
= 12.5%
Explanation:
a) Data and Calculations:
Trial balance on January 1, 2017, follows:
Account Titles                     Debit   Credit
Cash                          $10,000
Accounts receivable               9,000
Supplies                        18,000
Land
Equipment                      85,000
Accumulated depreciation (on equipment) Â Â Â $15,000
Other assets (not detailed to simplify)7,000
Accounts payable
Wages payable
Interest payable
Income taxes payable
Long-term notes payable
Common stock (8,000 shares, $.50 par value) Â 4,000
Additional paid-in capital                   87,000
Retained earnings                        23,000
Service revenue
Depreciation expense
Supplies expense
Wages expense
Interest expense
Income tax expense
Remaining expenses (not detailed to simplify)
Totals                        129,000  129,000
December 31:
Cash balance = $92,000 ($10,000+15,000-18,000+215,000+4,000-101,000+41,000-18,000 -28,000-28,000)
Accounts Receivable = $24,000 (9,000+56,000 -41,000)
Supplies = $21,000 ($18,000 + 30,000 - 27,000)
Land = $18,000
Accumulated Depreciation = $32,000 ($17,000 + 15,000)
Other assets = $25,000 (7,000 +18,000)
Accounts Payable = $29,000 ($27,000 + 30,000 - 28,000)
Wages Payable = $20,000
Interest Payable = $1,000
Income Tax Payable $16,000
Long-term Notes Payable = $15,000
Common stock = $6,000 ($4,000 + 2,000)
Additional capital = $89,000 ($87,000 + 2,000)
Service Revenue = $271,000
Depreciation expense = $17,000
Supplies expense = $27,000
Wages expense= $20,000
Interest expense = $1,000
Income tax expense $16,000
Remaining expenses $128,000
Dividends = $28,000
Adjusted Trial balance on December 31, 2017, follows:
Account Titles                      Debit   Credit
Cash                           $92,000
Accounts receivable                24,000
Supplies                          21,000
Land                             18,000
Equipment                       85,000
Accumulated depreciation (on equipment) Â Â Â $32,000
Other assets (not detailed to simplify)25,000
Accounts payable                         29,000
Wages payable                           20,000
Interest payable                            1,000
Income taxes payable                      16,000
Long-term notes payable                   15,000
Common stock (8,000 shares, $.50 par value) Â 6,000
Additional paid-in capital                   89,000
Retained earnings                        23,000
Service revenue                         271,000
Depreciation expense            17,000
Supplies expense               27,000
Wages expense                20,000
Interest expense                 1,000
Income tax expense             16,000
Remaining expenses
 (not detailed to simplify)        128,000
Dividends                     28,000
Totals                       502,000  502,000
Current Assets:
Cash               $92,000
Accounts receivable    24,000
Supplies              21,000
Total Current Assets $137,000
Land                18,000
Equipment           85,000
Accumulated Depr. Â Â (32,000)
Total long-term assets = $71,000
Total assets = $208,000
Current Liabilities:
Accounts payable     $29,000
Wages payable        20,000
Interest payable         1,000
Income taxes payable   16,000
Total current liabilities $66,000
