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Number Name 1110 Cash 1120 Accounts Receivable 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 2101 Accounts Payable 2102 Advanced Payments 2103 Interest Payable 2105 Salaries Payable 2106 Income Taxes Payable 2201 Mortgage Payable 2202 Notes Payable 3100 Capital Stock 3200 Retained Earnings 3300 Dividends Normal Balance Debit Debit Debit Debit Debit Debit Credit Debit Credit Debit Credit Debit Credit Credit Credit Credit Credit Credit Credit Credit Credit Debit 4100 Computer & Consulting Revenue 5010 Rent Expense 5020 Salary Expense 5030 Advertising Expense 5040 Repairs & Maint. Expense 5050 Oil & Gas Expense 5080 Supplies Expense 5090 Interest Expense 5100 Insurance Expense 5110 Depreciation Expense 5120 Income Tax Expense Credit Debit Debit Debit Debit Debit Debit Debit Debit Debit Debit The Byte of Accounting Corporation (Byte) is a computer advisory consulting busies that works with small and midsize businesses. Business Operations: After an initial review of a new client's operations a proposal is developed by a team to improve the client's operations by the purchase of off the shelf software or more often the modification of off the shelf software. Significant Accounting Policies: The business luas adopted the following accounting policies: Fixed assets that cost less than $500.00 are expensed. The allowance method is used to account for bad debts. . When calculating depreciation, assets purchased during a month are treated as if purchased on the first day of the month. Transaction Description of transaction 01. June 1: an investor, made an investment in Byte by purchasing 2,000 shares of its common stock paying $48,000.00 in cash. 02. June 1: an investor, made an investment in Byte by purchasing 2,690 shares of its common stock paying $26,880.00 in cash, and contributing to Byte computer equipment with a fair market value of $37,680. 03. June 1: an investor, made an investment in Byte by purchasing 2,397 shares of its common stock paying $42,000.00 in cash, and contributing to Byte computer equipment with a fair market value of $14,400 and office equipment with a fair value of $1,128. 04. June 2: Check # 6001 for $30,000 was issued as a down payment for new computer equipment that cost $150,000 on invoice 827364 from Dell. A five-year note was executed by Byte for the balance. 05. June 4: Additional office equipment costing $4,000 was purchased on credit from Perer's Discount Computer Corporation, invoice number AB9865. 06. June 4: Defective office equipment costing $800 was returned to Perez's Discount Computer for credit to be applied against the outstanding balance owed by Byte. 07. June 10: Check# 6002 was issued for $23,000 as a partial payment on the balance owed to Dell related to the purchase of computer equipment, Invoice 827364. 08. June 14: Check # 6003 was issued to purchase a one-year insurance policy covering its computer equipment. The cost of the insurance is $5,808.00 and paid to Seth's Insurance. The effective date of the policy was June 16 and the invoice number was 2387. 09. June 16: A check in the amount of $6,500 was received for services performed for Pitman Pictures June 16: Byte purchased a building and the land it is on for $119,000.00 to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $19,000.00 Byte of Accounting The balance of the cost is to be allocated to the building. Check # 6004 was used to make the down payment of $11,900.00. A thirty year mortgage with an inital payement due on August 1st, was established for the balance. 11. June 17: Check# 6005 for $3,800.00 was paid for rent for June and July. Put the total amount into the Prepaid Rent account. 12. June 17: Byte received invoice number 26354 in the amount of $325.00 from Fida Marketing Agency for advertising, 13. June 21: Accounts payable in the amount of $3,200.00 were paid with Check # 6006. 14. June 21: Check # 6007 was used to purchase a scanning machine for the office from Sicre's Office Machines Express for $675.00. The invoice number was 975-328. 15. June 21: Billed various miscellaneous local customers $4,900 for consulting services performed. 16. June 22: Check # 6008 was used to pay salaries of $2,530.00 to equipment operators for the week ending June 18. Ignore payroll taxes. 17. June 22: Received a bill for $1,090.00 from Computer Parts and Repair Co. for repairs to the computer equipment. The invoice number was 43254. 18. June 22: Check # 6009 was used to pay invoice number 26354, the advertising bill that was previously received from Fida Digital Marketing Agency. 19. June 23: Purchased office supplies for $630.00 from Office Max on account. The invoice number was 65498. 20. June 23: Cash in the amount of $3,925 was received on billings. 21. June 28: Billed various miscellaneous local customers $5,805 for consulting services performed. 22. June 29: Check# 6010 was used to pay invoice number 43254, the computer repair bill that was previously received from Computer Parts and Repair Co. 23. June 29: Byte received $5,500.00 from customers billed when work was completed. 24. June 29: Check # 6011 was used to pay salaries of $2,530.00 to equipment operators for the week ending June 25. Ignore payroll taxes. 25. June 30: Received a bill for the amount of $790.00 from O&G Oil and Gas Co. The invoice number was 784537. 26. June 30: Paid a cash dividend of $0.20 per share to the three shareholders of Byte, using Check # 6012-6014. [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 -ROUND (number,num digits). 27. June 30: The rent payment made in transaction# 11 was for June and July. Expense the amount associated with one month's rent. 28 June 30: A physical inventory showed that only $259.00 worth of office supplies remained on hand as of June 30. Byte of Accounting June 30: The annual interest 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. 29. 30. June 30: Information relating to the prepaid insurance may be obtained from transaction #8. Record a journal entry to reflect that one half month's insurance has expired. 31, June 30: A review of Byte's job worksheets show that there are unbilled revenues in the amount of $5,125 for the period of June 28-30. 32 June 30: The accountant has calculated the following depreciation expenses for the month: Building - $242.06 Computer Equipment - $3,368.00 Office Equipment - $55.99 33 June 30: A review of the payroll records show that unpaid salaries in the amount of $1,518.00 are owed to the employees of Byte for three days, Jme 28 - 30. 34. June 30:n the Internal Auditor, indicated that $2,080.00 of the revenue recorded in June will not be earned until August. 35. June 30: The note payable in transaction #4 and transaction #7 is a five-year note, with interest at 12%. The June interest expense from this note is $966.67. 36. June 30: 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.1 Closing Entries 37. Close the revenue accounts. 38 Close the expense accounts. 39. Close the dividends account