Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Transaction 01. Description of transaction June 1: Byte of Accounting, Inc. issued 2,650 shares of its common stock to Jeremy after $28,600 in cash and

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Transaction 01. Description of transaction June 1: Byte of Accounting, Inc. issued 2,650 shares of its common stock to Jeremy after $28,600 in cash and computer equipment with a fair market value of $40,300 were received 02 June 1: Byte of Accounting, Inc. issued 2,019 shares of its common stock after acquiring from Courtney $37,700 in cash, computer equipment with a fair market value of $14,040 and office equipment with a fair value of $754 03 June 1: Byte of Anxunting, Inc. acquired $78,000 in cash from John Thomas and issued 3,000 shares of its common stock 04 June 2: A down payment of $30,000 in cash was made on additional computer equipment that was purchased for $150,000. A five-year note was executed by Byte for the balance OS June 4: Additional office equipment costing $500 was purchased on credit from Discount Computer Corporation 06. June &: Unsatisfactory office equipment costing $100 was retumed to Discount Computer for credit to be applied against the outstanding balance owed by Byte. 07 June 10: Byte paid $23,000 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 $5,136 in cash. The effective date of the policy was June 16. 09. June 16: Computer consultation revenue of $8,250 was received 10. June 16: Byte purchased a building and the land it is on for $143,000, to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $23,000. The balance of the cost is to be allocated to the building. Byte made a cash down payment of $14,300 and executed a mortgage for the balance. The mortgage is payable in eight cqual annual installments beginning July 1. 11. June 17: Cash of $5,700 was paid for rent for June, July and August. Put the total amount into the Prepaid Rent account 12 2 June 17: Received a bill of S350 from the local newspaper for advertising, 13. June 21: Billed various miscellancous local customers 54,900 for consulting services performed 14. June 21: A fax machine for the office was purchased for $650 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 $1,215 from Computer Parts and Repair Co. for repairs to the computer equipment 18. June 22: Paid salaries of $1,035 to equipment operators for the week ending June 18. 19. June 23: Cash in the amount of $3,925 was received on billings. JUNE 23. Turn UTC Supps U UU UUUL MCCUTU We purchase as a turtaSC 20. 21. June 28: Billed $5,595 to miscellaneous customers for services performed to June 25. 22. June 29: Cash in the amount of $5,300 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 $1,035 to equipment operators for the week ending June 25. 25. June 30: Received a bill for the amount of $890 from O&G Oil and Gas Co. 26. June 30: Paid a cash dividend of $0.18 per share to the three shareholders of Byte. [IMPO NOTE: The number of shares of capital stock outstanding can be determined from the first 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 as with one month's rent. 28. A physical inventory showed that only $281.00 worth of office supplies remained on hand June 30 29. The TUT mterest rate on the mortgage payable Was TZ3 percent interest expense for one-nar month should be computed because the building and land were purchased and the liability dan 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 $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 $8,500. The office equipment has a scrap value of $350. 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 S621 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 $120,000. On June 10, cight days later, $23,000 was repaid. Interest expense must be calculated on the $120,000 for eight days. In addition, interest expense on the $97,000 balance of the loan ($120,000 less $23,000 - $97,000) 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. LAMPUKIANT NUIC: since ne mcome txes are a percent or ine 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 bulances which you can then transfer to the appropriate financial statement 35 Closing Entries 2 3 4 5 0 8 9 10 11 12 13 14 15 16 12 18 19 20 21 22 23 24 25 26 27 Number Name 1110 Cash 1120 Account Receivable 1130 Prepaid insurance 1140 Prepaid Rent 1150 Office Supplies 1211 Omce Equip 1212 Acoum. Depronice Equip 1311 Computer Equip 1312 Acoum. Depr Computer Equip 1411 Building Con 1412 Accum Depr-Bulding 1510 Land 2101 Accounts Payable 2102 Advanced Payment 2103 Interest Payable 2105 Satanes Payable 2106 Income Taxos Payable 2201 Mortgage Payable 2202 Notes Payable 3100 capital Stock 3200 Retained Gamings 3300 Dividends 3400 Income Summary 4100 Computer & Consulting Revenue 5010 Rent Expense 5020 Salary Expense 5030 Advertising Expense 5040 Repairs & Maint. Expenso 5050 Oil & Gas Expono 5080 Supplies Expono 5090 Interest Expense 5100 Insurance Expense 5110 Depreciation Expono 5120 Income Tax Expono Noma Balance Dabil Dubi Debi Debi Debil DO Credit Ceb Credit Debi Crad Debi Credi Credit Credit Credit Credit Credit Credit Credit Credi Dobi Credit Credit De Deb De Dat CX COIL Dobil Dobil Dubit Debi 28 29 30 31 32 33 34 35 30

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting And Reporting

Authors: Mr Barry Elliott, Jamie Elliott

16th Edition

027377817X, 978-0273778172

More Books

Students also viewed these Accounting questions

Question

If you were Akio, what would you do now?

Answered: 1 week ago