32. The fixed assets have estimated useful lives as follows: Building - 31.5 years Computer Equipment - 5.0 years 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 building's scrap value is $8,000. The office equipment has a scrap value of $500. 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 $516.00 are owed by Byte for three days, June 28 - 30. 34. The note payable relating to the June 2, and 10 transactions 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 $144,000. On June 10, eight days later, $27,500 was repaid. Interest expense must be calculated on the $144,000 for eight days. In addition, interest expense on the $116,500 balance of the loan ($144,000 less $27,500 = $116,500) must be calculated for the 20 days remaining in the month of June.] 35. Income taxes are to be computed at the rate of 25 percent of net income before taxes. [IMPORTANT NOTE: Since the income taxes are a percent of the net income you will want to prepare the Income Statements through the Net Income Before Tax line. The worksheet contains all of the accounts and their balances which you can then transfer to the appropriate financial statement.] Closing Entries 36. Close the revenue accounts. 37. Close the expense accounts. 38. Close the income summary account. 39. Close the dividends account. 18. June 22: Paid the advertising bill that was received on June 17. 19. June 23: Purchased office supplies for $555 on credit. Record the purchase as an increase to the assets 20. June 23: Cash in the amount of $3,605 was received on billings. 21. June 28: Billed $5,490 to miscellaneous customers for services performed to June 25. 22. June 29: Paid the bill received on June 22, from Computer Parts and Repairs Co. SP 23. June 29: Cash in the amount of $5,201 was received for billings. 24. June 29: Paid salaries of $860 to equipment operators for the week ending June 25. 25. June 30: Received a bill for the amount of $815 from O&G Oil and Gas Co. 26. June 30: Paid a cash dividend of $0.17 per share to the three shareholders of Byte. [IMPORTANT NOTE The number of shares of capital stock outstanding can be determined from the first three transactions.] Adjusting Entries - Round to two decimal places. 27. The rent payment made on June 17 was for June, July and August. Expense the amount associated with one month's rent. 28. A physical inventory showed that only $225.00 worth of office supplies remained on hand as of June 30. 29. The annual interest rate on the mortgage payable was 9.00 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. Information relating to the prepaid insurance may be obtained from the transaction recorded on June 14. Expense the amount associated with one half month's insurance, 31. A review of Byte's job worksheets show that there are unbilled revenues in the amount of $9,250 for the period of June 28-30 SI A A 10 Wrap Text Arial lili Merge & Cer B x fx B A purchased for $180,000. A five-year note was executed by Byte for the balance. 05. June 4: Additional office equipment costing $600 was purchased on credit from Discount Computer Corporation 06. June 8: Unsatisfactory office equipment costing $120 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte. 07. June 10: Byte paid $27,500 on the balance it owed on the June 2 purchase of computer equipment. 08. June 14: A one-year insurance policy covering its computer equipment was purchased by Byte for $6,480 in cash. The effective date of the policy was June 16. 09. June 16: A check in the amount of S7,250 was received for consulting revenue. 10. June 16: Byte purchased a building and the land it is on for $131,000, to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $21,000. The balance of the cost is to be allocated to the building. Byte made a cash down payment of $13,100 and executed a mortgage for the balance. The mortgage is payable in eight equal annual installments beginning July 1. 11. June 17: Cash of 56,300 was paid for rent for June July and August. Put the total amount into the Prepaid Rent account. 12. June 17: Received a bill of $275 from the local newspaper for advertising. 13. June 21: Accounts payable in the amount of $480 were paid. 14. June 21: A fax machine for the office was purchased for $850 cash. 15. June 21: Billed various miscellaneous local customers $4,500 for consulting services performed. 16. June 22: Paid salaries of S860 to equipment operators for the week ending June 18. 17. June 22: Received a bill for $1,140 from Computer Parts and Repair Co. for repairs to the computer equipment FAQ Welcome Chart of Accounts Transactions General Journal 01. June 1: Byte of Accounting, Inc. acquired $73,600 in cash from Lauryn and issued 3,200 shares of its common stock, 02. June 1: Byte of Accounting, Inc. issued 2,590 shares of its common stock to Kevin Mouton after $25,070 in cash and computer equipment with a fair market value of $34,500 were received. 03. June 1: Byte of Accounting, Inc. issued 1,693 shares of its common stock after acquiring from Courtney $28,750 in cash, computer equipment with a fair market value of $9,660 and office equipment with a fair value of $529. 04. June 2: A down payment of $36,000 in cash was made on additional computer equipment that was purchased for $180,000. A five-year note was executed by Byte for the balance, 1 Name 01 01 Jun 01 Jun 01 73,600.00 escripuon Issuance of common stock Issuance of common stock 1110 Cash 3100 Capital Stock 73,600.00 02 02 02 Jun 01 Jun 01 Jun 01 1110 Cash 1311 Computer Equip 3100 Capital Stock Issuance of common stock Issuance of common stock Issuance of common stock 25,070.00 34,500.00 59,570.00 03 03 03 03 Jun 01 Jun 01 Jun 01 Jun 01 1110 Cash 1311 Computer Equip 1211 Office Equip 3100 Capital Stock Issuance of common stock Issuance of common stock Issuance of common stock Issuance of common stock 28,750.00 9,660.00 529.00 38,939.00 + 04 180,000.00 04 04 Jun 02 Jun 02 Jun 02 1311 Computer Equip 1110 Cash 2202 Notes Payable Payment on computer equipment Payment on computer equipment Payment on computer equipment 36,000.00 144,000.00 05 05 Jun 04 Jun 04 1211 Office Equip 2101 Accounts Payable Office equipment purchase Office equipment purchase 600.00 600.00 06 06 Jun 08 Jun 08 2101 Accounts Payable 1211 Office Equip Retumed goods for credit Retumed goods for credit 120.00 3 120.00 5 6 7 8 9 10 07 07 Jun 10 Jun 10 2202 Notes Payable 1110 Cash Payment on note payable (CE) Payment on note payable (CE) 27,500.00 27.500.00 08 Jun 14 Jun 14 1130 Prepaid Insurance 1110 Cash Purchase of Insurance policy Purchase of Insurance policy 6.480.00 6,480.00 12 43 44 45 46 47 48 09 09 Jun 16 Jun 16 1110 Cash Payment for service completed 4100 Computer & Consulting Payment for service completed 7.250.00 7.250.00 FAQ Welcome Tra AC 10 10 10 10 Name 1411 Building Cost 1510 Land 1110 Cash 2201 Mortgage Payable Jun 16 Jun 16 Jun 16 Jun 16 110,000.00 21,000.00 Description Purchase of Land and Building Purchase of Land and Building Purchase of Land and Building Purchase of Land and Building 13,100.00 117,900.00 6,300.00 11 11 Jun 17 Jun 17 1140 Prepaid Rent 1110 Cash Rent payment Rent payment 6,300.00 275.00 12 12 Jun 17 Jun 17 5030 Advertising Expense 2101 Accounts Payable Advertsing fee received Advertsing fee received 275.00 13 13 Jun 21 Jun 21 2101 Accounts Payable 1110 Cash 480.00 Payment on accounts payable Payment on accounts payable 480.00 14 14 Jun 21 Jun 21 1211 Office Equip 1110 Cash Purchase of Office supplies Purchase of Office supplies 850.00 850.00 15 15 Jun 21 Jun 21 1120 Accounts Receivable Billing for services completed 4100 Computer & Consulting Billing for services completed 4,500.00 4,500.00 16 16 Jun 22 Jun 22 5020 Salary Expense 1110 Cash Salary expense (eqiuptment operator) Salary expense (egiuptment operator) 860.00 860.00 1 2 3 4 5 6 7 B 39 30 21 32 33 17 17 Jun 22 Jun 22 5040 Repairs & Maint. Expen Bill received for repairs (O&G) 2101 Accounts Payable Bill received for repairs (O&G) 1.140.00 1.140.00 18 18 Jun 22 Jun 22 2101 Accounts Payable 1110 Cash Payment on advertising bil Payment on advertising bill 275.00 275.00 Tral DO Dat Acc Name 555.00 19 19 Jun 23 Jun 23 Description Office supply purchase on credit Office supply purchase on credit 1150 Office Supplies 2101 Accounts Payable 555.00 16 27 38 39 00 01 3,605.00 20 20 Jun 23 Jun 23 1110 Cash 1120 Accounts Receivable Cash received on billings Cash received on billings 3,605.00 02 103 5,490.00 21 21 Jun 28 Jun 28 1120 Accounts Receivable Billing for service performed 4100 Computer & Consulting Billing for service perfomed 5,490.00 1,140.00 22 22 Jun 29 Jun 29 2101 Accounts Payable 1110 Cash Paid bill received (O&G) Pald bill received (O&G) 1,140.00 23 23 Jun 29 Jun 29 1110 Cash 1120 Accounts Receivable Cash Received for billings Cash Received for billings 5,201.00 5,201.00 104 05 106 107 10B 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 OR 24 24 Jun 29 Jun 29 5020 Salary Expense 1110 Cash Salaries paid (equipment operators) Salaries paid (equipment operators) 860.00 860.00 25 25 Jun 30 Jun 30 5050 Oil & Gas Expense 2101 Accounts Payable Received bil (O&G) Received bill (O&G) 815.00 815.00 26 26 Jun 30 Jun 30 3300 Dividends 1110 Cash Payment of cas dividend Payment of cas dividend 1,272.11 1.272.11 27 27 Jun 30 Jun 30 5010 Rent Expense 1140 Prepaid Rent Expensed one months rent Expensed one months rent 2,100.00 2.100.00 FAQ Welcome Chart of Accounts Transactions General Journal Trar Date De Name Acc Description 330.00 28 28 Jun 30 Jun 30 5080 Supplies Expense 1150 Office Supplies End of the month Office Supplies End of the month Office Supplies 330.00 442.13 29 29 Jun 30 Jun 30 5090 Interest Expense 1110 Cash First Interest payment First Interest payment 442.13 270.00 30 30 Jun 30 Jun 30 5100 Insurance Expense 1130 Prepaid Insurance Use of insurance (0.5 mon.) Use of insurance (0.5 mon.) 270.00 9,250.00 31 31 Jun 30 Jun 30 1120 Accounts Receivable Unbilled Revenues 4100 Computer & Consulting Unbiled Revenues 9,250.00 32 32 32 32 Jun 30 Jun 30 Jun 30 Jun 30 5110 Depreciation Expense Accumulated depreciation (June) 1312 Accum. Depr.-Carmputer Accumulated depreciation (June) 1412 Accum. Depr.-Buiding Accumulated depreciation (June) 1212 Accum. Depr.-Office Eq Accumulated depreciation (June) 516.00 33 33 Jun 30 Jun 30 5020 Salary Expense 2105 Salaries Payable Unpaid salary Expense Unpaid salary Expense 516.00 . 2 3 4 5 6 -7 58 59 70 71 72 73 74 75 176 177 34 34 Jun 30 Jun 30 5090 Interest Expense 2103 Interest Payable Interest on Accounts Payable Interest on Accounts Payable 35 35 Jun 30 Jun 30 5120 Income Tax Expense Income tax expense 2106 Income Taxes Payable Income tax expense 178 179 180 181 182 36 36 Jun 30 Jun 30 4100 Computer & Consulting Closing Revenue Account 3400 Income Summary Closing Revenue Account PA 3 37 37 37 37 37 37 37 37 37 37 37 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Name Description W37 Not in Balance by-$7,616.00 3400 Income Summary Closing expense account 5010 Rent Expense Closing expense account 5020 Salary Expense Closing expense account 5030 Advertising Expense Closing expense account 5040 Repairs & Maint Expen Closing expense account 5050 01 & Gas Expense Closing expense account 5100 Insurance Expense Closing expense account 5080 Supplies Expense Closing expense account 5090 Interest Expense Closing expense account 5110 Depreciation Expense Closing expense account 5120 Income Tax Expense Closing expense account 3,150.00 2,236.00 275.00 1,140.00 815.00 2 3 5 7 38 38 Jun 30 Jun 30 3400 Income Summary 3200 Retained Eamings Close Income Summary Account Close Income Summary Account 1 3 4 5 39 39 Jun 30 Jun 30 3200 Retained Eamings 3300 Dividends Closing of dividend account Closing of dividend account 7