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2763 Nicholas Smith Transaction Description of transaction 01. June 1: Hudson Bloom invested $106,766.00 cash and computer equipment with a fair market value of $33,660.00
2763 | Nicholas Smith |
Transaction | Description of transaction |
01. | June 1: Hudson Bloom invested $106,766.00 cash and computer equipment with a fair market value of $33,660.00 in his new business, Byte of Accounting. |
02. | June 1: Check # 5000 was used to purchased office equipment costing $506.00 from Office Express. The invoice number was 87417. |
03. | June 1: Check # 5001 was used to purchased computer equipment costing $11,880.00 from Nicholas Smith. The invoice number was 20117. |
04. | June 2: Check # 5002 was used to make a down payment of $30,000.00 on additional computer equipment that was purchased from Royce Computers, invoice number 76542. The full price of the computer was $150,000.00. A five-year note was executed by Byte for the balance. |
05. | June 4: Additional office equipment costing $600.00 was purchased on credit from Discount Computer Corporation. The invoice number was 98432. |
06. | June 8: Unsatisfactory office equipment costing $120.00 from invoice number 98432 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte. |
07. | June 10: Check # 5003 was used to make a $23,000.00 payment reducing the principal owed on the June 2 purchase of computer equipment from Royce Computers. |
08. | June 14: Check # 5004 was used to purchase a one-year insurance policy covering its computer equipment for $5,472.00 from Seth's Insurance. The effective date of the policy was June 16 and the invoice number was 2387. |
09. | June 16: A check in the amount of $6,250.00 was received for services performed for Pitman Pictures. |
10. | June 16: Byte purchased a building and the land it is on for $95,000.00 to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $15,000.00. The balance of the cost is to be allocated to the building. Check # 5005 was used to make the down payment of $9,500.00. A thirty year mortgage with an inital payement due on August 1st, was established for the balance. |
11. | June 17: Check # 5006 for$9,200.00 was paid for rent of the office space for June, July, August and September. |
12. | June 17: Received invoice number 26354 in the amount of $300.00 from the local newspaper for advertising. |
13. | June 21: Billed various miscellaneous local customers $4,300.00 for consulting services performed. |
14. | June 21: Check # 5008 was used to purchase a fax machine for the office from Office Machines Express for $700.00. The invoice number was 975-328. |
15. | June 21: Accounts payable in the amount of $480.00 were paid with Check # 5007. |
16. | June 22: Check # 5010 was used to pay the advertising bill that was received on June 17. |
17. | June 22: Received a bill for $1,115.00 from Computer Parts and Repair Co. for repairs to the computer equipment. The invoice number was 43254. |
18. | June 22: Check # 5009 was used to pay salaries of $935.00 to equipment operators for the week ending June 18. Ignore payroll taxes. |
19. | June 23: Cash in the amount of $3,445.00 was received on billings. |
20. | June 23: Purchased office supplies for $580.00 from Staples on account. The invoice number was 65498. |
21. | June 28: Billed $5,385.00 to miscellaneous customers for services performed to June 25. |
22. | June 29: Cash in the amount of $5,101.00 was received for billings. |
23. | June 29: Paid the bill received on June 22, from Computer Parts and Repairs Co with Check # 5011. |
24. | June 29: Check # 5012 was used to pay salaries of $935.00 to equipment operators for the week ending June 25. Ignore payroll taxes. |
25. | June 30: Received a bill for the amount of $890.00 from O & G Oil and Gas Co. The invoice number was 784537. |
26. | June 30: Check # 5013 was used to pay for airline tickets of $1,600.00 to send the kids to Grandma Ellen for the July 4th holiday. |
Adjusting Entries - Round to two decimal places. | |
27. | The rent payment made on June 17 was for June, July, August and September. Expense the amount associated with one month's rent. |
28. | A physical inventory showed that only $236.00 worth of office supplies remained on hand as of June 30. |
29. | The annual interest rate on the mortgage payable was 7.25 percent. Interest expense for one-half month should be computed because the building and land were purchased and the liability incurred on June 16. |
30. | Record a journal entry to reflect that one half month's insurance has expired. |
31. | A review of Bytes job worksheets show that there are unbilled revenues in the amount of $9,250 for the period of June 28-30. |
The fixed assets have estimated useful lives as follows: | |
Building - 31.5 years | |
Computer Equipment - 5.0 years | |
32. | Office Equipment - 7.0 years |
Use the straight-line method of depreciation. Management has decided that assets purchased during a month are treated as if purchased on the first day of the month. The buildings scrap value is $500. The office equipment has a scrap value of $450. The computer equipment has no scrap value. Calculate the depreciation for one month. | |
33. | A review of the payroll records show that unpaid salaries in the amount of $561.00 are owed by Byte for three days, June 28 - 30. Ignore payroll taxes. |
34. | The note payable to Royce Computers (transactions 04 and 07) is a five-year note, with interest at the rate of 12 percent annually. Interest expense should be computed based on a 360 day year. |
[IMPORTANT NOTE: The original note on the computer equipment purchased on June 2 was $120,000.00. On June 10, eight days later, $23,000.00 was repaid. Interest expense must be | |
calculated on the $120,000.00 for eight days. In addition, interest expense on the $97,000.00 balance of the loan ($120,000.00 less $23,000.00 = $97,000.00) must be calculated for the 20 days remaining in the month of June.] | |
Closing Entries | |
35. | Close the revenue accounts. |
36. | Close the expense accounts. |
37. | Close the income summary account. |
38. | Close the withdrawals account. |
A Byte of Accounting Income Statement For Month Ending June 30, 2023 Revenues Computer Revenue Expenses Rent Expense Salary Expense Advertising Expense Repairs \& Maint. Expense Oil \& Gas Expense Supplies Expense Interest Expense Insurance Expense Depreciation Expense Total Net Income A Byte of Accounting Statement of Owner's Equity For Month Ending June 30, 2023 Total A Byte of Accounting Balance Sheet As of June 30, 2023 Assets Current Assets Cash Accounts Receivable Prepaid Insurance Prepaid Rent Office Supplies Total Long-Term Assets Office Equip. Accum. Depr.-Office Equip. Computer Equip. Accum. Depr.-Computer Equip. Building Cost Accum. Depr.-Building Land Total Total Assets Liabilities Current Liabilities Accounts Payable Advanced Payment Interest Payable Salaries Payable Total Long-Term Liabilities Mortgage Payable Notes Payable Total Total Liabilities Owner's Equity Hudson Bloom, Capital Total Liabilities and Owner's Equity A Byte of Accounting Income Statement For Month Ending June 30, 2023 Revenues Computer Revenue Expenses Rent Expense Salary Expense Advertising Expense Repairs \& Maint. Expense Oil \& Gas Expense Supplies Expense Interest Expense Insurance Expense Depreciation Expense Total Net Income A Byte of Accounting Statement of Owner's Equity For Month Ending June 30, 2023 Total A Byte of Accounting Balance Sheet As of June 30, 2023 Assets Current Assets Cash Accounts Receivable Prepaid Insurance Prepaid Rent Office Supplies Total Long-Term Assets Office Equip. Accum. Depr.-Office Equip. Computer Equip. Accum. Depr.-Computer Equip. Building Cost Accum. Depr.-Building Land Total Total Assets Liabilities Current Liabilities Accounts Payable Advanced Payment Interest Payable Salaries Payable Total Long-Term Liabilities Mortgage Payable Notes Payable Total Total Liabilities Owner's Equity Hudson Bloom, Capital Total Liabilities and Owner's Equity
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