Journal entries all the way to 39

A Byte of Accounting, Inc. Income Statement For Month Ending January 0,1900 Revenues Computer & Consulting Revenue Expenses Rent Expense Salary Expense Advertising Expense Repairs & Maint. Expense Oil & Gas Expense Supplies Expense Interest Expense Insurance Expense Depreciation Expense Total Net Income Before Tax Income Tax Expense (Round i two decimal places) Net Income After Tax A Byte of Accounting, Inc. Statement of Changes in Retained Earnings For Month Ending January 0, 1900 Total Balance, Beginning of Period Net Income Dividends Balance, End of Period A Byte of Accounting, Inc. Balance Sheet As of January 0, 1900 Assets Current Assets Cash Accounts Receivable Prepaid Insurance Prepaid Rent Office Supplies Total Long-Term Assets Office Equip. Accum. Depr.-Office Equip. Computer Equip. Accum. Depr.-Computer Equip. Building Cost Accum. Depr.-Building Land Total Total Assets Liabilities Current Liabilities Accounts Payable Advanced Payment Interest Payable Salaries Payable Income Taxes Payable Total A Normal Balance Number Name 1110 Cash Debit 1120 Accounts Receivable Debit 1130 Prepaid Insurance 1140 Prepaid Rent 1150 Office Supplies 1211 Office Equip. 1212 Accum. Depr.-Office Equip. 1311 Computer Equip. 1312 Accum. Depr.-Computer Equip 1411 Building Cost 1412 Accum. Depr.-Building 1510 Land Debit Debit Debit Debit Credit Debit Credit 0 1 Debit 2 Credit Debit 3 2101 Accounts Payable 2102 Advanced Payments 2103 Interest Payable 2105 Salaries Payable 2106 Income Taxes Payable 2201 Mortgage Payable 2202 Notes Payable 4 Credit 5 Credit 6 Credit 7 Credit 8 Credit 9 Credit 0 Credit 3100 Capital Stock 3200 Retained Eamings Credit Credit 2 3 3300 Dividends Debit 3400 Income Summary 4100 Computer & Consulting Revenue 5010 Rent Expense 4 Credit 5 Credit 6 Debit 5020 Salary Expense 5030 Advertising Expense 5040 Repairs & Maint. Expense 5050 Oil & Gas Expense 5080 Supplies Expense Interest Expense 5100 Insurance Expense 5110 Depreciation Expense 5120 Income Tax Expense Debit 7 8 Debit 9 Debit 0 Debit 1 Debit 2 3 Debit 4 Debit 5 Debit Transaction Description of transaction June 1 Byte of Accounting, Inc. acquired $71,400 in cash from Lauryn and issued 3,400 shares of 01. its common stock June 1 Byte of Acco unting, Inc. issued 2,620 shares of its common stock to Carter Rowland after $23,310 in cash and computer equipment with a fair mark et value of $3 1 ,7 10 were received 02. June 1: Byte of Acco unting, Inc. issued 2,794 shares of its common stock after acquiring from Courtney $45,150 in cash, computer equipment with a fair mark et value of $12,600 and office equipment with a fair value of $924. 03. 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 balan ce. 04 June 4: Additional office equipment costing $400 was purchased on credit from Discount Computer Comoration. 05. June 8: Unsatis factory office equip ment costing $80 was retumed to Discount Computer for cred it to be applied against the outstanding balance owed by Byte. 06 07 June 10: Byte paid $27,500 on the balance it owed on the June 2 purch ase of computer equipment. June 14: A one-year insurance policy covering its computer equipment was purchased by Byte for $5,304 in cash. 08. The effective date of the policy was June 16. 09 June 16: A check in the amount of $6,500 was received for consulting revenue. June 16: Byte purchased a build ing and the land it is on for $107,000, to house its repair facilities |and to store computer equipment. The lot on which the building is located is valued at $17,000. The balance of the cost is to be allocated to the build ing. Byte made a cash down payment of$10,700 and executed a mortgage for the balance. The mortgage is payable in eight equal annual installments beginning July 1 10 June 17: Cash of$4,000 was paid for rent for June and July. Put the total amount into the Prepaid Rent account. 11 June 17: Received a bill of $325 from the lo cal newspaper for advertising. 12 13. June 21 Accounts payable in the amount of $320 were paid. June 21: A fax machine for the office was purch as ed for $700 cash. 14. 15. June 21: Billed various miscellan eo us local custo mers $4,400 for consulting services perfomed. 16. June 22: Paid salaries of $835 to equipment operators for the week ending June 18. June 22: Received a bill for $1,115 from Computer Parts and Repair Co. for repairs to the computer 17 equipment. 18. June 22: Paid the advertising bill that was received on June 17. 19. June 23: Purch ased office supplies for $505 on credit. Record the purchase as an increase to the 20. June 23: Cash in the amount of $3,525 was received on billings. 21 June 28: Billed $5,595 to miscellan eo us custo mers 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 $5,300 was received for billings. 24 June 29: Paid salaries of $835 to equipment operators for the week ending June 25. 25 June 30: Received a bill for the amount of$915 from O & G Oil and Gas Co June 30: Paid a cash dividend of$0.18 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 Itransactions.] 26. 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 27 month's rent. A physical inventory showed that only $202.00 worth ofoffice supplies remained on hand as of June 28 30 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 incurred on 29 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 amount of $5,250 for the period of June 28-30. 31 32 The fixed assets have estimated useful lives as follows: Build ing -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 $400. 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 $501.00 are owed by Byte 33. 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 annuallv. Interest expense should be computed based on a 360 dav vear. IMPORTANT NOTE: The origin al note on the computer equipment purchased on June 2 was $144.000 On June 10. eight davs later. $27.500 was repaid. Interest expense must be calculated on the $144,000 for eight days. In add ition, interest expense on the $116,500 balance of the loan (144 000 1re $27 50o 34. e1 16 500mazst ha aaleu latad far tha 20 davs ramainina in tha The note payab le relating to the June 2, and 10 transactions is a five-year note, with interest at the rate 34 of 12 Dercent annually. Interest expense should be comouted based on a 360 dav vear IMPORTANT NOTE: The orig in al $144.000 On June 10. eight davs later. $27.500 was reoaid. 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 Junel note on the computer equipment purchased on June 2 was 35 Income taxes are to be computed at the rate of 25 percent ofnet 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. Close the income summary account 38 39 Close the dividends account. Note: You can only enter data into the yel low filled cells. A Byte of Accounting, Inc. General Journal Date Account 01 Name Description 02 Debit Credit 03 04 ransaction 14