Byte of Accounting, Inc.

Stephanie Granada Byte of Accounting, Inc.

Stephanie Granada $2864$

Description of transaction

Description of transaction

June $1$: Byte of Accounting, Inc. issued $2,580$ shares of its common stock to Jeremy after $$22,880$ in cash and computer equipment with a fair market value of $$33,880$ were received.

June $1$: Byte of Accounting, Inc. issued $1,920$ shares of its common stock after acquiring from Courtney $$29,700$ in cash, computer equipment with a fair market value of $$11,440$ and office equipment with a fair value of $$1,100.$

June $1$: Byte of Accounting, Inc. acquired $$79,200$ in cash from Stephanie Granada and issued $3,600$ shares of its common stock.

June $2$: A down payment of $$30,000$ in cash was made on additional computer equipment that was purchased for $$150,000.$ A five$-$year note was executed by Byte for the balance.

June $4$: Additional office equipment costing $$600$ was purchased on credit from Discount Computer Corporation.

June $8$: Unsatisfactory office equipment costing $$120$ was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte.

June $10$: Byte paid $$23,000$ on the balance it owed on the June $2$ purchase of computer equipment.

June $14$: A one$-$year insurance policy covering its computer equipment was purchased by Byte for $$5,640$ in cash. The effective date of the policy was June $16.$

June $16$: Computer consultation revenue of $$6,500$ was received.

June $16$: Byte purchased a building and the land it is on for $$95,000,$ to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $$15,000.$ The balance of the cost is to be allocated to the building. Byte made a cash down payment of $$9,500$ and executed a mortgage for the balance. The mortgage is payable in eight equal annual installments beginning July $1.$

June $17$: Cash of $$7,200$ was paid for rent for June, July and August. Put the total amount into the Prepaid Rent account.

June $17$: Received a bill of $$350$ from the local newspaper for advertising.

June $21$: Billed various miscellaneous local customers $$4,400$ for consulting services performed.

June $21$: A fax machine for the office was purchased for $$750$ cash.

June $21$: Accounts payable in the amount of $$480$ were paid.

June $22$: Paid the advertising bill that was received on June $17.$

June $22$: Received a bill for $$1,140$ from Computer Parts and Repair Co$.$ for repairs to the computer equipment.

June $22$: Paid salaries of $$960$ to equipment operators for the week ending June $18.$

June $23$: Cash in the amount of $$3,525$ was received on billings.

June $23$: Purchased office supplies for $$580$ on credit. Record the purchase as an increase to the assets.

June $28$: Billed $$5,490$ to miscellaneous customers for services performed to June $25.$

June $29$: Cash in the amount of $$5,201$ was received for billings.

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 $25.$

June $30$: Received a bill for the amount of $$940$ from O & G Oil and Gas Co$.$

June $30$: Paid a cash dividend of $$0\mathrm{.}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.

The rent payment made on June $17$ was for June, July and August. Expense the amount associated with one month's rent.

A physical inventory showed that only $$236\mathrm{.}00$ worth of office supplies remained on hand as of June $30.$

The annual interest rate on the mortgage payable was $7\mathrm{.}50$ percent. Interest expense for one$-$half month should be computed because the building and land were purchased and the liability incurred on June $16.$

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.

A review of Byte$$s job worksheets show that there are unbilled revenues in the amount of $$5,000$ for the period of June $28-30.$

The fixed assets have estimated useful lives as follows:

Building $-31\mathrm{.}5$ years

Computer Equipment $-5\mathrm{.}0$ years

Office Equipment $-7\mathrm{.}0$ 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$$s scrap value is $$7,000.$ The office equipment has a scrap value of $$500.$ The computer equipment has no scrap value. Calculate the depreciation for one month.

A review of the payroll records show that unpaid salaries in the amount of $$576$ are owed by Byte for three days, June $28-30.$

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