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Transaction 01. Description of transaction June 1: Byte of Accounting, Inc. issued 2,630 shares of its common stock to Jeremy after $29,700 in cash and computer equipment with a fair market value of $41,310 were received. 02 June 1: Byte of Accounting, Inc. issued 2,331 shares of its common stock after acquiring from Courtney $49.950 in cash, computer equipment with a fair market value of $11,880 and office equipment with a fair value of $1,107. 03. June 1: Byte of Accounting, Inc. acquired 597,200 in cash from Coley Riley and issued 3,600 shares of its common stock. 04. June 2. A down payment of $31,000 in cash was made on additional computer equipment that was purchased for $155,000. A five-year note was executed by Byte for the balance. 05 June 4: Additional office equipment costing 5500 was purchased on credit from Discount Computer Corporation 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. 07. June 10: Byte paid $23.750 on the balance it owed on the June 2 purchase of computer equipment 08. June 14: A one-year insurance policy covering its computer equipment was purchased by Byte for $6,312 in cash. The effective date of the policy was June 16. 09. June 16: Computer consultation revenue of $7,750 was received. 10. June 16: Byte purchased a building and the land it is on for $149,000, to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $24,000. The balance of the cost is to be allocated to the building. Byte made a cash down payment of $14.900 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, August and September. Put the total amount into the Prepaid Rent account. 12 June 17: Received a bill of $450 from the local newspaper for advertising. 13. June 21. Billed various miscellaneous local customers 54,700 for consulting services performed. 14. June 21: A fax machine for the office was purchased for $675 cash 15. June 21: Accounts payable in the amount of $400 were paid. 16. June 22: Paid the advertising bill that was received on June 17. 17. June 22: Received a bill for $1,090 from Computer Parts and Repair Co. for repairs to the computer equipment. 18. June 22: Paid salaries of $935 to equipment operators for the week ending June 18. 19. June 23. Cash in the amount of $3.765 was received on billings. 20. June 23: Purchased office supplies for $655 on credit. Record the purchase as an increase to the assets 21. June 28: Billed $5 280 to miscellaneous customers for services performed to June 25. 22 June 29: Cash in the amount of $5,001 was received for billings 23. June 29. Paid the bill received on June 22, from Computer Parts and Repairs Co. 24. June 29: Paid salaries of 5935 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 $0.15 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 August and September. Expense the amount associated with one month's rent. 28. A physical inventory showed that only $270.00 worth of office supplies remained on hand as of June 30. 29. 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. 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 31. A review of Byte's job worksheets show that there are unbilled revenues in the amount of $5,375 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 $7,000. 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 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 $124,000. On June 10, eight days later, $23,750 was repaid. Interest expense must be calculated on the $124,000 for eight days. In addition, interest expense on the $100,250 balance of the loan ($124.000 less $23,750 = $100,250) must be calculated for the 20 days remaining in the month of June.] 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.) 35. Closing Entries 36. Close the revenue accounts. 37. Close the expense accounts. 38 Close the income summary account. 39. Close the dividends account. Transaction Account Date De bit Credit 01 01 01 Jun 01 Jun 01 Jun 01 Name 1110 Cash 1311 Computer Equip 3100 Capital Stock Description Issue of common stock Issue of common stock Issue of common stock 29.700.00 41,310.00 71,010,00 02 02 02 02 Jun 01 Jun 01 Jun 01 Jun 01 1110 Cash 1311 Computer Equip 1211 Office Equip 3100 Capital Stock Issue of common stock Issue of common stock Issue of common stock Issue of common stock 49,950.00 11,880.00 1.107.00 62,937.00 97,200.00 03 03 Jun 01 Jun 01 1110 Cash 3100 Capital Stock Issue of common stock Issue of common stock 97 200.00 155,000.00 04 04 04 Jun 02 Jun 02 Jun 02 1311 Computer Equip. Purchase of computer equipment 1110 Cash Purchase of computer equipment 2202 Notes Payable Purchase of computer equipment 31,000.00 124,000.00 500.00 05 05 Jun 04 Jun 04 1211 Office Equip 2101 Accounts Payable Purchase of offcie equipment Purchase of offcie equipment 500.00 06 06 Jun 08 Jun 08 100.00 2101 Accounts Payable 1211 Office Equip Return office equipment Return office equipment 100.00 07 07 Jun 10 Jun 10 2202 Notes Payable 1110 Cash 23,750.00 Payment of computer equipment Payment of computer equipment 23.750.00 6,312.00 08 08 Jun 14 Jun 14 1130 Prepaid Insurance 1110 Cash Computer insurance Computer insurance 6,312.00 7,750.00 09 09 Jun 16 Jun 16 1110 Cash Computer consultancy revenue 4100 Computer & Consultin Computer consultancy revenue 7.750.00 24,000.00 125,000.00 10 10 10 10 Jun 16 Jun 16 Jun 16 Jun 16 1510 Land 1411 Building Cost 1110 Cash 2201 ortgage Payable Purchase of land and building Purchase of land and building Purchase of land and building Purchase of land and building 14,900.00 134,100.00 11 11 Jun 17 Jun 17 1140 Prepaid Rent 1110 Cash Payment of rent Payment of rent 7200.00 7,200.00 2 450.00 12 12 Jun 17 Jun 17 5030 Advertising Expense Advertisinng expense 2101 Accounts Payable Advertisinng expense 450.00 13 13 Jun 21 Jun 21 4,700.00 1120 Accounts Receivable Consulting revenue 4100 Computer & Consultin Consulting revenue 4,700.00 14 14 Jun 21 Jun 21 1211 Office Equip 1110 Cash 675.00 Purchase of fax machine Purchase of fax machine 675.00 , 400.00 15 15 Jun 21 Jun 21 2101 Accounts Payable 1110 Cash Payment of accounts payable Payment of accounts payable 400.00 450.00 16 16 Jun 22 Jun 22 2101 Accounts Payable 1110 Cash Payment of advertsing expense Payment of advertsing expense 450.00 1,090.00 17 17 Jun 22 Jun 22 5040 Repairs & Maint. Expe Computer repairing fee 2101 Accounts Payable Computer repairing fee 1,090.00 18 18 Jun 22 Jun 22 5020 Salary Expense 1110 Cash 935.00 Salary payment Salary payment 935.00 Jun 23 Jun 23 COCO 1110 Cash Received payment 1120 Accounts Receivable Received payment 3.765.00 3,765.00 lala Jun 23 Jun 23 1150 Office Supplies 2101 Accounts Payable Purchase of Office Supplies Purchase of Office Supplies 655.00 655.00 21 21 Jun 28 Jun 28 1120 Accounts Receivable Record of revenue 4100 Computer & Consultin Record of revenue 5,280.00 5280.00 22 22 Jun 29 Jun 29 1110 Cash Receive Payment 1120 Accounts Receivable Receive Payment 5,001.00 5,001.00 23 23 Jun 29 Jun 29 2101 Accounts Payable 1110 Cash 1,090.00 Payment of computer repairs Payment of computer repairs 1,090.00 24 24 Jun 29 Jun 29 5020 Salary Expense 1110 Cash Salary payment Salary payment 935.00 935.00 25 25. Jun 30 Jun 30 5050 Oil & Gas Expense 2101 Accounts Payable Oil and gas expense Oil and gas expense 990.00 990.00 26 26 Jun 30 Jun 30 3300 Dividends 1110 Cash Dividends paid Dividends paid 1284.151 1284.15 27 27 Jun 17 Jun 17 5010 Rent Expense 1140 Prepaid Rent Rent expense recognized Rent expense recognized 1.800.00 1,800.00 28 28 Jun 30 Jun 30 5080 Supplies Expense 1150 Office Supplies 385.00 Supplies expense Supplies expense 385.00 516.84 29 29 Jun 30 Jun 30 5090 Interest Expense 2103 Interest Payable Interest adjustment Interest adjustment 516.84 263.00 30 30 Jun 30 Jun 30 5100 Insurance Expense Insurance adjustment 1130 Prepaid Insurance Insurance adjustment 263.00 Jun 30 Jun 30 5,375.00 1120 Accounts Receivable Unbilled revenue 4100 Computer & Consultin Unbilled revenue 5,375.00 3,802.62 32 32 32 32 Jun 30 Jun 30 Jun 30 Jun 30 5110 Depreciation Expense Depreciation expense 1412 Accum. Depr.-Building Depreciation expense 1312 Accum. Depr.-Comput Depreciation expense 1212 Accum. Depr.-Office E Depreciation expense 312.17 3.469.83 20.62 561.00 33 33 Jun 30 Jun 30 5020 Salary Expense 2105 Salaries Payable Salary expense Salary expense 561.00 34 34 999.00 Jun 30 Jun 30 5090 Interest Expense 2103 Interest Payable Interest adjustment Interest adjustment 999.00 35 35 Jun 30 Jun 30 5120 Income Tax Expense Income tax expense 2106 Income Taxes Payable Income tax expense 2.594.38 2.594.38 36 36 Jun 30 Jun 30 23.105.00 4100 Computer & Consultin Closing revenue 3400 Income Summary Closing revenue 23.105.00 15.321.84 37 37 37 37 37 37 37 37 37 37 37 Jun 30 Jun 30 Jun 30 Jun 301 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 3400 Income Summary Closing expense 5010 Rent Expense Closing expense 5020 Salary Expense Closing expense 5030 Advertising Expense Closing expense 5040 Repairs & Maint Expe Closing expense 5050 Oil & Gas Expense Closing expense 5080 Supplies Expensel Closing expense 5090 Interest Expense Closing expense 5100 Insurance Expense Closing expense 5110 Depreciation Expense Closing expense 5120 Income Tax Expense Closing expense 1,800.00 2.431.00 450.00 1.090.00 990.00 385.00 1,515.84 263.00 3,802.62 2.594.38 38 38 Jun 30 Jun 30 3400 Income Summary 3200 Retained Earnings Closing income summary Closing income summary 7/783.15 7/78315 39 39 Jun 30 Jun 30 3200 Retained Earnings 3300 Dividends Closing dividends Closing dividends 1.284.15 1284.15 Adjusting Entries Debit Credit 5,375.00 Unadjusted Trial Balance Debit Credit 104,434.85 1214.00 6.312.00 7.200.00 655.00 2,182.00 263.00 1,800.00 385.00 Adjusted Trial Balance Debit Credit 104,434.85 6,589.00 6,049.00 5.400.00 270.00 2,182.00 20.62 208 190.00 3.469.83 125,000.00 312.17 24,000.00 1,645.00 20.62 208.190.00 3.469.83 Account 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 125,000.00 312 17 24,000.00 1,645.00 1515.84 561.00 2,594.38 1,515.84 561.00 2,594.38 134, 100.00 100,250.00 231,14700 134,100.00 100 250.00 231 147.00 1.284.15 1284.15 17.730.00 5,375,00 23.105.00 1.800.00 561.00 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 1870.00 450.00 1,090.00 990.00 1,800.00 2.431.00 450.00 1,090.00 990.00 385.00 1.515.84 263.00 3,802.62 2,594.38 385.00 1515.84 263.00 3,802.62 2.594.38 TOTAL 484,872.00 484,872.00 16.296.84 16.296.84 498,720.84 498,720.84 A Byte of Accounting, Inc. Income Statement For Month Ending June 30, 2021 Revenues Computer & Consulting Revenue $ 23,105.00 Expenses Rent Expense Salary Expense Advertising Expense Repairs & Maint. Expense Oil & Gas Expense Supplies Expense Interest Expense Insurance Expense Depreciation Expense Total Expenses $ 1,800.00 $ 2,431.00 $ 450.00 $ 1,090.00 $ 990.00 $ 385.00 $ 1,515.84 $ 263.00 $ 3,802.62 12,727.46 Net Income Before Tax $ 10,377.54 Income Tax Expense (Round to two decimal places) 2,594.38 Net Income After Tax $ 7,783.16 A Byte of Accounting, Inc. Statement of Changes in Retained Earnings For Month Ending June 30, 2021 Total Balance, Beginning of Period Net Income $ 7,783.16 7,783.16 1,284.15 6,499.01 Dividends Balance, End of Period $ A Byte of Accounting, Inc. Balance Sheet As of June 30, 2021 Assets Current Assets Cash Accounts Receivable Prepaid Insurance Prepaid Rent Office Supplies Total $ 104.434.85 $ 6.589.00 $ 6.049.00 $ 5.400.00 $ 270.00 $122.742.85 $ 2,182.00 20.62 $ 2,161 38 Long-Term Assets Office Equip Accum. Depr-Office Equip. Computer Equip Accum. Depr.-Computer Equip Building Cost Accum. Depr.-Building $208,190.00 3,469.83 $204.720.17 $125,000.00 312.17 $124.687.83 24,000.00 Land Total Total Assets $355 569.38 $478,312 23 Liabilities $ 1,645.00 Current Liabilities Accounts Payable Advanced Payment Interest Payable Salaries Payable Income Taxes Payable Total $ 1,515.84 $ 561.00 $ 2,594.38 $ 6,316.22 Long-Term Liabilities Mortgage Payable Notes Payable Total Total Liabilities $ 134,100.00 100,250.00 234,350.00 $ 240,666.22 Stockholder's Equity $ 231,147.00 6,499.01 Capital Stock Retained Earnings Total Total Liabilities and Stockholder's Equity 237,646.01 $ 478,312.23