Byte of Accounting, Inc. Brian Harris 9070 Transaction Description of transaction June 1: Byte of Accounting, Inc. issued 2,630 shares ofits common stack to Jeremy after $30,740 in cash and computer equipment with a fair market value of$45,530 were received 01 June 1: Byte of Accounting, Inc. issued 2,639 shares ofits common stock after acquiring from Courtney $62,350 in cash, computer equipment with a fair market value of$13,340 and office equipment with a fair value of$841 02 June 1: Byte of Accounting, Inc. acquired $52,200 in cash from Brian Harris and issued 1,800 shares ofits common stock 03. June 2: Adown payment of $29,000 in cash was made on additional computer equipment that was purchased for $145,000. A five-year note was executed by Byte for the balance 04 June 4: Additional office equipment costing $400 was purchased on credit from Discount Computer Corporation 05. June 8: Unsatisfactory office equipment costing $80 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte 06 |June 10: Byte paid $22,250 on the balance it owed on the June 2 purchase of computer equipment 07 June 14: A one-year insurance policy covering its computer equipment was purchased by Byte for $4,968 in cash. The effective date ofthe policy was June 16 08. June 16: Computer consultation revenue of$8,000 was received 09 June 16: Byte purchaseda building and the land i 1s on for S12Z5,U00, to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $20,000. The balance of the cost is to be allocated to the building. Byte made a cash down payment off$12,500 and executed a mortgage for the balance. The mortgage is payable in eight equal annual installments beaiaaina luly 1. 10 June 17: Cash of$7,200 was paid for rent for June, July and August. Put the total amount into the Prepaid Rent account 11 June 17: Received a bill of$475 from the local newspaper for advertising. 12. June 21: Billed various miscellaneous local customers $4,500 for consulting services performed. 13. June 21: A fax machine for the office was purchased for $750 cash 14. 15 June 21 Accounts payable in the amount of$320 were paid June 22: Paid the advertising bill that was received on June 17 16. June 22: Received a bill for $1,165 from Computer Parts and Repair Co. for repairs to the computer equipment 17. June 22: Paid salaries of $960 to equipment operators for the week ending June 18 18 June 23; Cash in the amount of $3,605 was received on billings. 19. TJune 23 Purcase omee suppes rar s333 o ceu. Kecorame purcnse s erese to e 20. June 28: Billed S5,910 to miscellaneous customers for seervices performed to June 25. 21 June 29: Cash in the amount of$5,600 was received for billings 22. June 29: Paid the bill received on June 22, from Computer Parts and Repairs Co June 29: Paid salaries of $960 to equipment operators for the week ending June 25 24. June 30: Received a bill for the amount of$940 from O& GOil and Gas Co 25. June 30: Paid a cash dividend of $021 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. 26 Adjusting Entries Round to two decimal places The rent payment made on June 17 was for June, July and August. Expense the amount associated with one month's rent 27 Aphysical inventory showed that only $225.00 worth ofoffice supplies remained on hand as of June 30 28 THe u Thteest rare n te mgage payae ws pecet Tnteest cxpese ror aue |month should be computed because the building and land were purchased and the liability incurred on. 29 16 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. 30. A review of Byte's job worksheets show that there are unbilled revenues in the 31 amount of $8,750 for the period of June 28-30 The fixed assets have estimated useful lives as follows 32 Building 315 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 ofthe month. The building's scrap value is $500. The office equipment has a scrap value of$300. The computer equipment has no scrap value. Calculate the depreciation for one month Areview of the payroll records show that unpaid salaries in the amount of$576 are owed by Byte for three days, June 28-30 33 The note payable relating to the June 2, and 10 transactionns is a five-year note, with interest at the rate 34 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 |$116,000. On June 10, eight days later, $22,250 was repaid. Interest expense must be calculated on the $116,000 for eight days. In addition, interest expense on the $93,750 balance ofthe loan ($116,000 less $22,250-$93,750) must be calculated for the 20 days remaining in the month of June Income taxes are to be computed at the rate of 25 percent ofnet income before taxes. 35 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 Close the revenue accounts 36. 37 Close the expense accounts Close the income summary account. 38 39 Close the dividends account A Byte of Accounting, Inc. General Journal Note: You can only enter data Into the yellow illed cells. Transaction Date Account 01 Name Description 02 03 04 05 06 07 Debit Credit 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Byte of Accounting, Inc. Brian Harris 9070 Transaction Description of transaction June 1: Byte of Accounting, Inc. issued 2,630 shares ofits common stack to Jeremy after $30,740 in cash and computer equipment with a fair market value of$45,530 were received 01 June 1: Byte of Accounting, Inc. issued 2,639 shares ofits common stock after acquiring from Courtney $62,350 in cash, computer equipment with a fair market value of$13,340 and office equipment with a fair value of$841 02 June 1: Byte of Accounting, Inc. acquired $52,200 in cash from Brian Harris and issued 1,800 shares ofits common stock 03. June 2: Adown payment of $29,000 in cash was made on additional computer equipment that was purchased for $145,000. A five-year note was executed by Byte for the balance 04 June 4: Additional office equipment costing $400 was purchased on credit from Discount Computer Corporation 05. June 8: Unsatisfactory office equipment costing $80 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte 06 |June 10: Byte paid $22,250 on the balance it owed on the June 2 purchase of computer equipment 07 June 14: A one-year insurance policy covering its computer equipment was purchased by Byte for $4,968 in cash. The effective date ofthe policy was June 16 08. June 16: Computer consultation revenue of$8,000 was received 09 June 16: Byte purchaseda building and the land i 1s on for S12Z5,U00, to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $20,000. The balance of the cost is to be allocated to the building. Byte made a cash down payment off$12,500 and executed a mortgage for the balance. The mortgage is payable in eight equal annual installments beaiaaina luly 1. 10 June 17: Cash of$7,200 was paid for rent for June, July and August. Put the total amount into the Prepaid Rent account 11 June 17: Received a bill of$475 from the local newspaper for advertising. 12. June 21: Billed various miscellaneous local customers $4,500 for consulting services performed. 13. June 21: A fax machine for the office was purchased for $750 cash 14. 15 June 21 Accounts payable in the amount of$320 were paid June 22: Paid the advertising bill that was received on June 17 16. June 22: Received a bill for $1,165 from Computer Parts and Repair Co. for repairs to the computer equipment 17. June 22: Paid salaries of $960 to equipment operators for the week ending June 18 18 June 23; Cash in the amount of $3,605 was received on billings. 19. TJune 23 Purcase omee suppes rar s333 o ceu. Kecorame purcnse s erese to e 20. June 28: Billed S5,910 to miscellaneous customers for seervices performed to June 25. 21 June 29: Cash in the amount of$5,600 was received for billings 22. June 29: Paid the bill received on June 22, from Computer Parts and Repairs Co June 29: Paid salaries of $960 to equipment operators for the week ending June 25 24. June 30: Received a bill for the amount of$940 from O& GOil and Gas Co 25. June 30: Paid a cash dividend of $021 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. 26 Adjusting Entries Round to two decimal places The rent payment made on June 17 was for June, July and August. Expense the amount associated with one month's rent 27 Aphysical inventory showed that only $225.00 worth ofoffice supplies remained on hand as of June 30 28 THe u Thteest rare n te mgage payae ws pecet Tnteest cxpese ror aue |month should be computed because the building and land were purchased and the liability incurred on. 29 16 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. 30. A review of Byte's job worksheets show that there are unbilled revenues in the 31 amount of $8,750 for the period of June 28-30 The fixed assets have estimated useful lives as follows 32 Building 315 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 ofthe month. The building's scrap value is $500. The office equipment has a scrap value of$300. The computer equipment has no scrap value. Calculate the depreciation for one month Areview of the payroll records show that unpaid salaries in the amount of$576 are owed by Byte for three days, June 28-30 33 The note payable relating to the June 2, and 10 transactionns is a five-year note, with interest at the rate 34 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 |$116,000. On June 10, eight days later, $22,250 was repaid. Interest expense must be calculated on the $116,000 for eight days. In addition, interest expense on the $93,750 balance ofthe loan ($116,000 less $22,250-$93,750) must be calculated for the 20 days remaining in the month of June Income taxes are to be computed at the rate of 25 percent ofnet income before taxes. 35 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 Close the revenue accounts 36. 37 Close the expense accounts Close the income summary account. 38 39 Close the dividends account A Byte of Accounting, Inc. General Journal Note: You can only enter data Into the yellow illed cells. Transaction Date Account 01 Name Description 02 03 04 05 06 07 Debit Credit 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35