Question
June 1:Hudson Bloom invested $136,734.00 cash and computer equipment with a fair market value of $40,820.00 in his new business, Byte of Accounting. June 1:Check
June 1:Hudson Bloom invested $136,734.00 cash and computer equipment with a fair market value of $40,820.00 in his new business, Byte of Accounting.
June 1:Check # 5000 was used to purchased office equipment costing $754.00 from Office Express.The invoice number was 87417.
June 1:Check # 5001 was used to purchased computer equipment costing $11,960.00 from Jessica.The invoice number was 20117.
June 2:Check # 5002 was used to make a down payment of $32,000.00 on additional computer 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 $300.00 was purchased on credit from Discount Computer Corporation.The invoice number was 98432.
June 8:Unsatisfactory office equipment costing $60.00 from invoice number 98432 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte.
June 10:Check # 5003 was used to make a $24,500.00 payment reducing the principal owed on the June 2 purchase of computer equipment from Royce Computers.
June 14: Check # 5004 was used to purchase a one-year insurance policy covering its computer equipment for $5,472.00 from Seth's Insurance.The effective date of the policy was June 16 and the invoice number was 2387.
June 16:A check in the amount of$7,250.00 was received for services performed for Pitman Pictures.
June 16:Byte purchased a building and the land it is on for $131,000.00 to house its repair facilities and to store computer equipment.The lot on which the building is located is valued at $21,000.00.The balance of the cost is to be allocated to the building.Check # 5005 was used to make the down payment of $13,100.00.A thirty year mortgage with an initial payment due on August 1st, was established for the balance.
June 17:Check # 5006 for$8,400.00 was paid for rent of the office space for June, July, August and September.
June 17:Received invoice number 26354 in the amount of $300.00 from the local newspaper for advertising.
June 21: Billed various miscellaneous local customers $4,900.00 for consulting services performed.
June 21:Check # 5008 was used to purchase a fax machine for the office from Office Machines Express for $750.00.The invoice number was 975-328.
June 21:Accounts payable in the amount of $240.00 were paid with Check # 5007.
June 22:Check # 5010 was used to pay the advertising bill that was received on June 17.
June 22:Received a bill for $1,265.00 from Computer Parts and Repair Co. for repairs to the computer equipment.The invoice number was 43254.
June 22:Check # 5009 was used to pay salaries of $885.00 to equipment operators for the week ending June 18.Ignore payroll taxes.
June 23:Cash in the amount of $3,925.00 was received on billings.
June 23:Purchased office supplies for $580.00 from Staples on account.The invoice number was 65498.
June 28:Billed $5,595.00 to miscellaneous customers for services performed to June 25.
June 29:Cash in the amount of $5,300.00 was received for billings.
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 $885.00 to equipment operators for the week ending June 25.Ignore payroll taxes.
June 30:Received a bill for the amount of $940.00 from O & G Oil and Gas Co.The invoice number was 784537.
June 30:Check # 5013 was used to pay for airline tickets of$1,800.00to send the kids to Grandma Ellen for the July 4th holiday.
Adjusting Entries - Round to two decimal places.
The rent payment made on June 17 was for June, July, August and September.Expense the amount associated with one month's rent.
A physical inventory showed that only $236.00 worth of office supplies remained on hand as of June 30.
The annualinterest rate on the mortgage payable was 9.25 percent.Interest expense for one-half month should be computed because the building and land were purchased and the liability incurred on June 16.
Record a journal entry to reflect that one half month's insurance has expired.
Areview of Byte's job worksheets show that there are unbilled revenues in the amount of $8,750 for the period of June 28-30.
The fixed assets have estimated useful lives as follows:
Building - 31.5 years
Computer Equipment - 5.0 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 $500. The office equipment has a scrap value of $450.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 $531.00 are owed byByte 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.]
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started