C D E A B Number Name 1110 Cash 1120 Accounts Receivable 4 1130 Prepaid Insurance 5 1140 Prepaid Rent 1150 Office Supplies 7 1211 Office Equip. B 1212 Accum. Depr.-Office Equip. 1311 Computer Equip. 10 1312 Accum. Depr.-Computer Equip. 11 1411 Building Cost 12 1412 Accum. Depr.-Building 13 1510 Land 14 2101 Accounts Payable 15 2102 Advanced Payments 16 2103 Interest Payable 17 2105 Salaries Payable 18 2106 Income Taxes Payable 19 2201 Mortgage Payable 2202 Notes Payable 21 3100 Capital Stock 22 3200 Retained Eamings 23 3300 Dividends 24 3400 Income Summary 25 4100 Computer & Consulting Revenue 26 5010 Rent Expense 27 5020 Salary Expense 28 5030 Advertising Expense 29 5040 Repairs & Maint. Expense 5050 Oil & Gas Expense 31 5080 Supplies Expense 5090 Interest Expense 33 5100 Insurance Expense 34 5110 Depreciation Expense 35 5120 Income Tax Expense 36 37 38 39 40 Normal Balance Debit Debit Debit Debit Debit Debit Credit Debit Credit Debit Credit Debit Credit Credit Credit Credit Credit Credit Credit Credit Credit Debit Credit Credit Debit Debit Debit Debit Debit Debit Debit Debit Debit Debit 20 30 32 13 Transaction Description of transaction 01. June 1: Byte of Accounting, Inc. aequired 95,200 in cash from Lauryn and issued 3,400 shares of its common stock 02. Jane 1: Byte of Accounting, Inc. issued 2,590 shares of its common stock to after $30,800 in cash and computer equipment with a fair market value of $41,720 were received 03. June 1: Byte of Accounting, Inc. issued 2,339 shares of its common stock after acquiring from Courtney S51,800 in cash, computer equipment with a fair market value of $12,880 and office equipment with a fair value of $812 04. June 2: A down payment of $32,000 in cash was made on additional computer equipment that was purchased for $160,000. A five-year note was executed by Hyte for the balance 11 22 05. June 4 Additional office equipment costing $500 was purchased on credit from Discount Computer Corporation 14 06. June 8: Unsatisfactory office equipment costing $100 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte. 15 07. June 10: Byte paid $24,500 on the balance it owed on the June 2 purchase of computer equipment 17 08. June 14: A one-year insurance policy covering its computer equipment was purchased by Byte for $5.472 in cash. The effective date of the policy was June 16. 19 20 09. June 16 A check in the amount of 58,250 was received for consulting revenue, 10. June 16: Byto purchased a building and the land it is on for $95,000, to house its repair facilities and to store computeroquipment. 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. Byto made a cash down payment or $9,500 and executed a mortgage for the balance. The mortgage is payable in eight equal annual installments beginning July 1. 24 11. June 17: Cash of $7,500 was paid for rent for June, July and August. Put the total amount into the Prepaid Rent account 25 28 27 28 12 June 17: Received a bill of 350 from the local newspaper for advertising 13 June 21: Accounts payable in the amount of 5400 were paid 22 30 21 14. June 21. A fax machine for the orice was purchased for $750 cash Chart of Accounts Transactions A General Journal A Workahoot Income sa B C D 14. June 21: A fax machine for the office was purchased for $750 cash. 15. June 21: Billed various miscellaneous local customers $4,300 for consulting services performed. 16. June 22: Paid salaries of $935 to equipment operators for the week ending June 18. 17. June 22: Received a bill for $1,315 from Computer Parts and Repair Co. for repairs to the computer equipment 18. June 22: Paid the advertising bill that was received on June 17. 19. June 23: Purchased office supplies for S630 on credit. Record the purchase as an increase to the 20. June 23: Cash in the amount of $3,445 was received on billings 21. June 28: Billed $5,805 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. 23. June 29: Cash in the amount of $5,500 was received for billings, 24. June 29: Paid salaries of $935 to equipment operators for the week ending June 25. 25. June 30: Received a bill for the amount of $990 from O&G Oil and Gas Co. 26. June 30: Paid a cash dividend of $0.20 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 $259,00 worth of office supplies remained on hand as of June 30. 29. The annual interest rate on the mortgage payable was 8,25 percent. Interest expense for one- half month should be computed because the building and land were purchased and the liability 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 55 36 A B 31. A review of Byte's job worksheets show that there are unbilled revenues in the amount of $8,750 for the period of June 28-30. 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 $7,500. 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. 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 $128,000. On June 10, eight days later, 524,500 was repaid. Interest expense must be calculated on the $128,000 for eight days. In addition, interest expense on the S103,500 balance of the loan (S128,000 less $24,500 - $103,500) 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.) 14 Closing Entries 36. Close the revenue accounts, 35 86 87 88 37. Close the expense accounts B9 90 38. Close the income summary account. 39. Close the dividends account 91 92 93 94 95 96 97 90 W