Sisters Harriet and Meredith Adams began operations of their tool and die shop on January 1, 1988. The annual reporting period ends December 31. Assume that the trial balance on January 1, 2023, was as follows:
Transactions during 2023 follow. All dollars are in millions, except per share amounts:
- Borrowed $15 cash on a five-year, 8 percent note payable, dated March 1, 2023.
- Sold 4 million additional shares of common stock for cash at $1 market value per share on January 1, 2023.
- Purchased land for a future building site; paid cash, $13.
- Earned $215 in revenues for 2023, including $52 on credit and the rest in cash.
- Incurred $89 in wages expense and $25 in miscellaneous expenses for 2023, with $20 on credit and the rest paid in cash.
- Collected accounts receivable, $34.
- Purchased other non-current assets, $15 cash.
- Purchased supplies on account for future use, $27.
- Paid accounts payable, $26.
- Declared cash dividends on December 1, $25.
- Signed a three-year $33 service contract to start February 1, 2024.
- Paid the dividends in (j) on December 31.
Data for adjusting entries (amounts in millions):
- Supplies counted on December 31, 2023, $18.
- Depreciation for the year on the equipment, $10.
- Interest accrued on notes payable (to be computed).
- Wages earned by employees since the December 24 payroll but not yet paid, $16.
- Income tax expense, $11, payable in 2024
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