|
Transaction |
Description of
transaction |
| 01. |
June 1: Byte of
Accounting, Inc. issued 2,640 shares of its common stock to Jeremy
after $31,030 in cash and computer equipment with a fair market
value of $45,530 were received. |
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| 02. |
June 1: Byte of
Accounting, Inc. issued 2,382 shares of its common stock after
acquiring from Courtney $50,750 in cash, computer equipment with a
fair market value of $17,400 and office equipment with a fair value
of $928. |
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| 03. |
June
1: Byte of Accounting, Inc. acquired $87,000 in cash
from angel and issued 3,000 shares of its common stock. |
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| 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. |
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| 05. |
June 4: Additional
office equipment costing $300 was purchased on credit from Discount
Computer Corporation. |
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| 06. |
June 8:
Unsatisfactory office equipment costing $60 was returned to
Discount Computer for credit to be applied against the outstanding
balance owed by Byte. |
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| 07. |
June 10: Byte paid
$23,000 on the balance it owed on the June 2 purchase of computer
equipment. |
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| 08. |
June 14: A
one-year insurance policy covering its computer equipment was
purchased by Byte for $4,968 in cash. The effective date of the
policy was June 16. |
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| 09. |
June 16: Computer
consultation revenue of $6,500 was received. |
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| 10. |
June 16: Byte
purchased a building and the land it is on for $119,000, to house
its repair facilities and to store computer equipment. The lot on
which the building is located is valued at $19,000. The balance of
the cost is to be allocated to the building. Byte made a cash down
payment of $11,900 and executed a mortgage for the balance. The
mortgage is payable in eight equal annual installments beginning
July 1. |
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| 11. |
June 17: Cash of
$4,800 was paid for rent for June and July. Put the total amount
into the Prepaid Rent account. |
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| 12. |
June 17: Received
a bill of $325 from the local newspaper for advertising. |
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| 13. |
June 21: Billed
various miscellaneous local customers $4,400 for consulting
services performed. |
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| 14. |
June 21: A fax
machine for the office was purchased for $800 cash. |
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| 15. |
June 21: Accounts
payable in the amount of $240 were paid. |
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| 16. |
June 22: Paid the
advertising bill that was received on June 17. |
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| 17. |
June 22: Received
a bill for $1,215 from Computer Parts and Repair Co. for repairs to
the computer equipment. |
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| 18. |
June 22: Paid
salaries of $1,035 to equipment operators for the week ending June
18. |
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| 19. |
June 23: Cash in
the amount of $3,525 was received on billings. |
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| 20. |
June 23: Purchased
office supplies for $505 on credit. Record the purchase as an
increase to the assets. |
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| 21. |
June 28: Billed
$5,805 to miscellaneous customers for services performed to June
25. |
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| 22. |
June 29: Cash in
the amount of $5,500 was received for billings. |
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| 23. |
June 29: Paid the
bill received on June 22, from Computer Parts and Repairs Co. |
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| 24. |
June 29: Paid
salaries of $1,035 to equipment operators for the week ending June
25. |
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| 25. |
June 30: Received
a bill for the amount of $915 from O & G Oil and Gas Co. |
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| 26. |
June 30: Paid a
cash dividend of $0.20 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.] |
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Adjusting Entries
- Round to two decimal places. |
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| 27. |
The rent payment
made on June 17 was for June and July. Expense the amount
associated with one month's rent. |
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| 28. |
A physical
inventory showed that only $202.00 worth of office supplies
remained on hand as of June 30. |
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| 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. |
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| 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. |
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| 31. |
A review of Byte’s
job worksheets show that there are unbilled revenues in the amount
of $5,750 for the period of June 28-30. |
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| 32. |
The fixed assets
have estimated useful lives as follows: |
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Building - 31.5
years |
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Computer Equipment
- 5.0 years |
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Office Equipment -
7.0 years |
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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 $300. The computer equipment
has no scrap value. Calculate the depreciation for one month. |
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| 33. |
A review of the
payroll records show that unpaid salaries in the amount of $621 are
owed by Byte for three days, June 28 - 30. |
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| 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. |
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[IMPORTANT NOTE:
The original note on the computer equipment purchased on June 2 was
$120,000. On June 10, eight days later, $23,000 was
repaid. Interest expense must be |
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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.] |
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| 35. |
Income taxes are
to be computed at the rate of 25 percent of net income before
taxes. |
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[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.] |