Homework answers / question archive / Recording transactions (Including adjusting and closing entries), preparing a set of financial statements, and performing ratio analysis Brothers Mike and Tim Hargen began operations of their tool and die shop (H&H Tool, Inc

Recording transactions (Including adjusting and closing entries), preparing a set of financial statements, and performing ratio analysis Brothers Mike and Tim Hargen began operations of their tool and die shop (H&H Tool, Inc

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Recording transactions (Including adjusting and closing entries), preparing a set of financial statements, and performing ratio analysis

Brothers Mike and Tim Hargen began operations of their tool and die shop (H&H Tool, Inc.) on January 1, 2021. The annual reporting period ends December 31. The trial balance on January 1, 2022, follows:

Transactions during 2022 follow:

• Borrowed $12,000 cash on a 5-year, 10 percent note payable, dated March 1, 2022
• Purchased land for a future building site; paid cash, $12,000
• Earned $208,000 in revenues for 2022, including $52,000 on credit and the rest in cash
• Sold 4,000 additional shares of capital stock for cash at $1 market value per share on January 1, 2022
• Incurred $111,000 in remaining expenses for 2022, including $20,000 on credit and the rest paid in cash
• Collected accounts receivable, $34,000
• Purchased other assets, $13,000 cash
• Paid accounts payable, $19,000
• Purchased supplies on account for future use, $23,000
• Signed a three-year $33,000 service contract to start February 1, 2023
• Declared and paid cash dividends, $22,000
• Supplies counted on December 31, 2022, $18,000
• Depreciation for the year on the equipment, $8,000
• Interest accrued on notes payable (to be computed)
• Wages earned by employees since the December 24 payroll but not yet paid, $16,000
• Income tax expense, $10,000, payable in 2022

Recording transactions (Including adjusting and closing entries), preparing a set of financial statements and performing ratio analysis Brothers Mike and Tim Hargen began operations of their tool and die shop (H&H Tool, Inc.) on January 1, 2021. The annual reporting period ends December 31. The trial balance on January 1, 2022 follows: Account Titles Cash Accounts receivable Supplies Land Equipment Accumulated depreciation (on equipment) Other assets (not detailed to simplify) Accounts payable Wages payable Interest payable Income taxes payable Long-term notes payable Contributed capital (85,000 shares) Retained earnings Service revenue Depreciated expense Supplies expense Wages expense Interest expense Income tax expense Remaining expenses (not detailed to simplify) Totals Debit $4,000 7,000 16,000 Credit 78,000 $8,000 5,000 85,000 17,000 $110,000 $110,000 Transactions during 2022 follow: A. B. C. D. E. F. G. H. I. J. K. Borrowed $12,000 cash on a 5-year, 10 percent note payable, dated March 1, 2022 Purchased land for a future building site; paid cash, $12,000 Earned $208,000 in revenues for 2022, including $52,000 on credit and the rest in cash Sold 4,000 additional shares of capital stock for cash at $1 market value per share on January 1, 2022 Incurred $111,000 in remaining expenses for 2022, including $20,000 on credit and the rest paid in cash Collected accounts receivable, $34,000 Purchased other assets, $13,000 cash Paid accounts payable, $19,000 Purchased supplies on account for future use, $23,000 Signed a three-year $33,000 service contract to start February 1, 2023 Declared and paid cash dividends, $22,000 Data for the adjusting entries: L. M. N. O. P. Supplies counted on December 31, 2022, $18,000 Depreciation for the year on the equipment, $8,000 Interest accrued on notes payable (to be computed) Wages earned by employees since the December 24 payroll but not yet paid, $16,000 Income tax expense, $10,000, payable in 2023 Required: 1. 2. 3. 4. Set up T-accounts for the accounts on the trail balance and enter beginning balances Prepare journal entries for transactions (A) through (K) and post them to the T-accounts Journalize and post the adjusting entries (L) through (P) Prepare an income statement (including earnings per share), the statement of stockholders’ equity, and the balance sheet 5. Journalize and post the closing entries 6. Compute the following ratios for 2022 and explain what the results suggest about the company: a. Current ratio b. Total asset turnover c. Net profit margin