38-46
Transaction Description of transaction June 1: Jeremy made an investment in Byte of Accounting, Inc., by purchasing 2,590 shares of its 01. common stock paying $27,810 in cash and by contributing computer equipment with a fair market value of $42,120. The par value of the common stock was $25 per share. June 1: Courtney made an investment in Byte of Accounting, Inc., by purchasing 449 shares of its 02. common stock by contributing computer equipment with a fair market value of $11,340 and office equipment with a fair value of $783. The par value of the common stock was $25 per share. 02 June 1: Shutong Luo made an investment in Byte of Accounting, Inc. by purchasing 5,250 shares of its common stock for $141,750 cash. The par value of the common stock was $25 per share. June 2: Check # 5002 was used to make a down payment of $32,000.00 on additional computer 04. equipment that was purchased from Royce Computers, invoice number 76542. The full price of the computer was $160,000.00. A five-year note was executed by Byte for the balance. -- June 4: Additional office equipment costing $700.00 was purchased on credit from Discount Computer 05. Corporation. The invoice number was 98432 June 8: Unsatisfactory office equipment costing $140.00 from invoice number 98432 was returned to 06. Discount Computer for credit to be applied against the outstanding balance owed by Byte. 07 June 10: Check # 5003 was used to make a $24,500.00 payment reducing the principal owed on the June *12 purchase of computer equipment from Rovce Computers. June 10: Purchased office supplies for $1,750.00 from Staples on account. The invoice number was "161298. Included in the purchase was 10 units of Super RoutePro at a cost of $55.00 each. June 14: Check # 5004 was used to purchase a one-year insurance policy covering its computer equipment 09. for $5,472.00 from Seth's Insurance. The effective date of the policy was June 16 and the invoice number was 2387. 10. June 16: Checks in the amount of $7,250.00 was received for services performed for cash customers. June 16: Byte purchased a building and the land it is on for $119,000.00 to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $19,000.00. The 11. balance of the cost is to be allocated to the building. Check # 5005 was used to make the down payment of $11.900.00. A thirty year mortgage with an inital payement due on August 1st, was established for the balance. 12. June 17: Check # 5006 for $3,800.00 was paid for rent for June and July. June 17: Received invoice number 26354 in the amount of $325.00 from the local newspaper for advertising 14. June 21: Billed various miscellaneous local customers $4,700.00 for consulting services performed 15. June 21: Check # 5007 was used to purchase a fax machine for the office from Office Machines Express for $800.00. The invoice number was 975-328. 16. June 21: Accounts payable in the amount of $560.00 were paid with Check # 5008. 17. June 22: Check # 5009 was used to pay the advertising bill that was received on June 17. June 22: Received a bill for $1,290.00 from Computer Parts and Repair Co. for repairs to the computer equipment. The invoice number was 43254. 19 June 22: Check # 5010 was used to pay salaries of $910.00 to equipment operators for the week ending June 18. Ignore payroll taxes. 20. June 23: Cash in the amount of $3,765.00 was received on billings. 21 June 23: Purchased office supplies for $875.00 from Staples on account. The invoice number was 165498. Included in the purchase was 10 units of Super RoutePro at a cost of $61.00 each. 22. June 28: Billed $5,490.00 to miscellaneous customers for services performed to June 25. 23. June 29: Cash in the amount of $5,201.00 was received for billings. 24. June 29: Paid the bill received on June 22, from Computer Parts and Repairs Co with Check # 5011. June 29: Check # 5012 was used to pay salaries of $910.00 to equipment operators for the week ending June 25. Ignore payroll taxes. 26 June 30: Received a bill for the amount of $915.00 from O&G Oil and Gas Co. The invoice number was 784537. 27 June 30: Check # 5013 was used to pay for a cash dividend of $0.17 per share to Jeremy, a shareholder of Byte. June 30: Check # 5014 was used to pay for a cash dividend of $0.17 per share to Shutong Luo a shareholder of Byte. June 30: Check # 5015 was used to pay for a cash dividend of $0.17 per share to Courtney, a shareholder 29. of Byte. Adjusting Entries - Round to two decimal places. The rent payment made on June 17 was for June and July. Expense the amount associated with one 30. month's rent. A physical inventory showed that only $369.00 worth of general office supplies remained on hand as of 31. June 30. This did not include any of the Super RoutePro. There were 5 units of Super RoutePro on hand. We use FIFO to determine the valuation of the supplies. 32. The annual interest rate on the mortgage payable was 8.50 percent. Interest expense for one-half month should be computed because the building and land were purchased and the liability incurred on June 16. 33. Record a journal entry to reflect that one half month's insurance has expired. A review of Byte's job worksheets show that there are unbilled revenues in the amount of $18,750 for the period of June 28-30. The fixed assets have estimated useful lives as follows: The Building and the Office Equipment have the following estimated useful lives: 35. Building - 31.5 years Office Equipment - 7.0 years Management has decided that assets purchased during a month are treated as if purchased on the first day of the month. The building's salvage value is $7,000.00. The office equipment has a salvage value of $450.00. Calculate the depreciation for one month using the straight-line method of depreciation. The Computer Equipment has an estimated useful life of 5.00 years. Management has decided that assets purchased during a month are treated as if purchased on the first day 36. of the month. The computer equipment's scrap value is $20,000.00. Calculate the depreciation for one month using the double declining method of depreciation. A review of the payroll records show that unpaid salaries in the amount of $546.00 are owed by Byte for three days, June 28 - 30. Ignore payroll taxes. 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 $128,000.00. On June 10, eight days later, $24,500.00 was repaid. Interest expense must be calculated on the $128,000.00 for eight days. In addition, interest expense on the $103,500.00 balance of the loan ($128,000.00 less $24,500.00 = $103,500.00) must be calculated for the 20 days remaining in the month of June.] Based on the information on the "Bank Reconciliation" sheet prepare the journal entry required to increases cash. 40. decis Based on the information on the "Bank Reconciliation" sheet prepare the journal entry required to decreases cash. Our CPA has informed us to estimate that 1.00% of Computer & Consulting Revenue will be 41. uncollectable. 42. 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.] 42. 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 43. Close the revenue accounts. 44. Close the expense accounts. 45. Close the income summary account. 46. Close the dividends account. Statement Date 6/30/200x Deposits/Credits Checks/Debits 181,345.00 79,765.00 101,580.00 101,580.00 Ending Balance Activity in date order Date Jun 01 Jun 07 Jun 15 Jun 16 Jun 21 Jun 22 Jun 22 Jun 22 Jun 23 Jun 24 Jun 26 Jun 26 Jun 27 Jun 27 Jun 27 Jun 29 Description Deposit Paid check # 5002 Paid check # 5003 Deposit Paid check # 5005 NSF NSF service charge Paid check # 5006 Deposit Paid check # 306 Paid check # 5007 Paid check # 5008 Paid check # 5009 Elec Remit AT&T Telephone Paid check # 5010 Service Charge- Checks Amount 169,560.00 -32,000.00 -24,500.00 7,520.00 -11,900.00 -2,850.00 -25.00 -3,800.00 4,265.00 -1,800.00 -800.00 -560.00 -325.00 -225.00 -910.00 -70.00 Balance 169,560.00 137,560.00 113,060.00 120,580.00 108,680.00 105,830.00 105,805.00 102,005.00 106,270.00 104,470.00 103,670.00 103, 110.00 102,785.00 102,560.00 101,650.00 101,580.00 101,580.00 > Transactions General Journal Bank Reconcilation Worksheet Income Statement ... + Transaction Description of transaction June 1: Jeremy made an investment in Byte of Accounting, Inc., by purchasing 2,590 shares of its 01. common stock paying $27,810 in cash and by contributing computer equipment with a fair market value of $42,120. The par value of the common stock was $25 per share. June 1: Courtney made an investment in Byte of Accounting, Inc., by purchasing 449 shares of its 02. common stock by contributing computer equipment with a fair market value of $11,340 and office equipment with a fair value of $783. The par value of the common stock was $25 per share. 02 June 1: Shutong Luo made an investment in Byte of Accounting, Inc. by purchasing 5,250 shares of its common stock for $141,750 cash. The par value of the common stock was $25 per share. June 2: Check # 5002 was used to make a down payment of $32,000.00 on additional computer 04. equipment that was purchased from Royce Computers, invoice number 76542. The full price of the computer was $160,000.00. A five-year note was executed by Byte for the balance. -- June 4: Additional office equipment costing $700.00 was purchased on credit from Discount Computer 05. Corporation. The invoice number was 98432 June 8: Unsatisfactory office equipment costing $140.00 from invoice number 98432 was returned to 06. Discount Computer for credit to be applied against the outstanding balance owed by Byte. 07 June 10: Check # 5003 was used to make a $24,500.00 payment reducing the principal owed on the June *12 purchase of computer equipment from Rovce Computers. June 10: Purchased office supplies for $1,750.00 from Staples on account. The invoice number was "161298. Included in the purchase was 10 units of Super RoutePro at a cost of $55.00 each. June 14: Check # 5004 was used to purchase a one-year insurance policy covering its computer equipment 09. for $5,472.00 from Seth's Insurance. The effective date of the policy was June 16 and the invoice number was 2387. 10. June 16: Checks in the amount of $7,250.00 was received for services performed for cash customers. June 16: Byte purchased a building and the land it is on for $119,000.00 to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $19,000.00. The 11. balance of the cost is to be allocated to the building. Check # 5005 was used to make the down payment of $11.900.00. A thirty year mortgage with an inital payement due on August 1st, was established for the balance. 12. June 17: Check # 5006 for $3,800.00 was paid for rent for June and July. June 17: Received invoice number 26354 in the amount of $325.00 from the local newspaper for advertising 14. June 21: Billed various miscellaneous local customers $4,700.00 for consulting services performed 15. June 21: Check # 5007 was used to purchase a fax machine for the office from Office Machines Express for $800.00. The invoice number was 975-328. 16. June 21: Accounts payable in the amount of $560.00 were paid with Check # 5008. 17. June 22: Check # 5009 was used to pay the advertising bill that was received on June 17. June 22: Received a bill for $1,290.00 from Computer Parts and Repair Co. for repairs to the computer equipment. The invoice number was 43254. 19 June 22: Check # 5010 was used to pay salaries of $910.00 to equipment operators for the week ending June 18. Ignore payroll taxes. 20. June 23: Cash in the amount of $3,765.00 was received on billings. 21 June 23: Purchased office supplies for $875.00 from Staples on account. The invoice number was 165498. Included in the purchase was 10 units of Super RoutePro at a cost of $61.00 each. 22. June 28: Billed $5,490.00 to miscellaneous customers for services performed to June 25. 23. June 29: Cash in the amount of $5,201.00 was received for billings. 24. June 29: Paid the bill received on June 22, from Computer Parts and Repairs Co with Check # 5011. June 29: Check # 5012 was used to pay salaries of $910.00 to equipment operators for the week ending June 25. Ignore payroll taxes. 26 June 30: Received a bill for the amount of $915.00 from O&G Oil and Gas Co. The invoice number was 784537. 27 June 30: Check # 5013 was used to pay for a cash dividend of $0.17 per share to Jeremy, a shareholder of Byte. June 30: Check # 5014 was used to pay for a cash dividend of $0.17 per share to Shutong Luo a shareholder of Byte. June 30: Check # 5015 was used to pay for a cash dividend of $0.17 per share to Courtney, a shareholder 29. of Byte. Adjusting Entries - Round to two decimal places. The rent payment made on June 17 was for June and July. Expense the amount associated with one 30. month's rent. A physical inventory showed that only $369.00 worth of general office supplies remained on hand as of 31. June 30. This did not include any of the Super RoutePro. There were 5 units of Super RoutePro on hand. We use FIFO to determine the valuation of the supplies. 32. The annual interest rate on the mortgage payable was 8.50 percent. Interest expense for one-half month should be computed because the building and land were purchased and the liability incurred on June 16. 33. Record a journal entry to reflect that one half month's insurance has expired. A review of Byte's job worksheets show that there are unbilled revenues in the amount of $18,750 for the period of June 28-30. The fixed assets have estimated useful lives as follows: The Building and the Office Equipment have the following estimated useful lives: 35. Building - 31.5 years Office Equipment - 7.0 years Management has decided that assets purchased during a month are treated as if purchased on the first day of the month. The building's salvage value is $7,000.00. The office equipment has a salvage value of $450.00. Calculate the depreciation for one month using the straight-line method of depreciation. The Computer Equipment has an estimated useful life of 5.00 years. Management has decided that assets purchased during a month are treated as if purchased on the first day 36. of the month. The computer equipment's scrap value is $20,000.00. Calculate the depreciation for one month using the double declining method of depreciation. A review of the payroll records show that unpaid salaries in the amount of $546.00 are owed by Byte for three days, June 28 - 30. Ignore payroll taxes. 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 $128,000.00. On June 10, eight days later, $24,500.00 was repaid. Interest expense must be calculated on the $128,000.00 for eight days. In addition, interest expense on the $103,500.00 balance of the loan ($128,000.00 less $24,500.00 = $103,500.00) must be calculated for the 20 days remaining in the month of June.] Based on the information on the "Bank Reconciliation" sheet prepare the journal entry required to increases cash. 40. decis Based on the information on the "Bank Reconciliation" sheet prepare the journal entry required to decreases cash. Our CPA has informed us to estimate that 1.00% of Computer & Consulting Revenue will be 41. uncollectable. 42. 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.] 42. 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 43. Close the revenue accounts. 44. Close the expense accounts. 45. Close the income summary account. 46. Close the dividends account. Statement Date 6/30/200x Deposits/Credits Checks/Debits 181,345.00 79,765.00 101,580.00 101,580.00 Ending Balance Activity in date order Date Jun 01 Jun 07 Jun 15 Jun 16 Jun 21 Jun 22 Jun 22 Jun 22 Jun 23 Jun 24 Jun 26 Jun 26 Jun 27 Jun 27 Jun 27 Jun 29 Description Deposit Paid check # 5002 Paid check # 5003 Deposit Paid check # 5005 NSF NSF service charge Paid check # 5006 Deposit Paid check # 306 Paid check # 5007 Paid check # 5008 Paid check # 5009 Elec Remit AT&T Telephone Paid check # 5010 Service Charge- Checks Amount 169,560.00 -32,000.00 -24,500.00 7,520.00 -11,900.00 -2,850.00 -25.00 -3,800.00 4,265.00 -1,800.00 -800.00 -560.00 -325.00 -225.00 -910.00 -70.00 Balance 169,560.00 137,560.00 113,060.00 120,580.00 108,680.00 105,830.00 105,805.00 102,005.00 106,270.00 104,470.00 103,670.00 103, 110.00 102,785.00 102,560.00 101,650.00 101,580.00 101,580.00 > Transactions General Journal Bank Reconcilation Worksheet Income Statement ... +
