Byte of accounting Inc. issued 2600 shares of its common stock to Jeremy after $22000 in cash and computer equipment with a fair market value of $30000 were received.
June 1: Byte of accounting Inc. issued 2600 shares of its common stock to Jeremy after $22000
in cash and computer equipment with a fair market value of $30000 were received.
June 1: Byte of Accounting Inc. issued 2148 shares of its common stock after acquiring from
Courtney $33000 in cash, computer equipment with a fair market value of $9200 and
office equipment with a fair value of $760.
June 1: Byte of Accounting Inc. acquired $52000 in cash from John Clark and issued 2600 shares of
its common stock.
June 2: A down Payment of $34000 in cash was made on additional computer equipment
that was purchased for $170000. A five year note was executed by Byte for the balance.
June 4: Additional office equipment costing $500 was purchased on credit from Discount
Computer Corporation.
June 8: Unsatisfactory office equipment costing $100 was returned to Discount Computer
for credit to be applied against the outstanding balance owed by Byte.
June 10: Byte paid $26000 on the balance it owed on the June 2 purchase of computer equipment.
June 14: A One -Year insurance policy covering its computer equipment was purchased by Byte for
$5304 in cash. The effective date of the policy was June 16.
June 16: Computer consultation revenue of $7250 was received.
June 16: Byte purchased a building and land in its on for $107000,to house its repair facilities
and to store computer equipment . The lot on which the building its located is valued
at $17000. The balance of the cost is to be allocated to the building. Byte make a cash down
payment of $10700 and executed a mortgage for the balance. The mortgage is paid in
eight equal annual installments beginning July 1.
June 17: Cash of $5400 was paid for rent for June, July and August. Put the total amount into the
Prepaid Rent account.
June 17: Received a bill of $425 from the local newspaper for advertising.
June 21: Billed various miscellaneous local customers $4400 for consulting services performed.
June 21: A fax machine for the office was purchased for $675 cash.
June 21: Accounts Payable in the amount of $400 were paid.
June 22: Paid the advertising bill that was received on June 17.
June22: Received a bill for $1315 from Computer Parts and repair Co. for repairs to the Computer
Equipment.
June22: Paid salaries of $985 to equipment operators for the week ending June 18.
June23: Cash is the amount of $3525 was received on billings.
June 23: Purchased office supplies for $580 on credit. Record the purchase as an increase to the assets.
June 28: Billed $5700 to miscellaneous customers for services performed to June 25.
June 29: Cash in the amount of $5400 was received for billings.
June 29: Paid the bill received on June 22,from Computer Parts and Repairs Co.
June 29: Paid salaries of $985 to equipment operators for the week ending June 25.
June30: Received a bill for the amount of $940 from O& G oil and Gas Co.
June 30: Paid a cash dividends of 0.19 per share to the three shareholders of Byte.
The number of shares of capital stock outstanding can be determined from the first three transactions.
Adjusting Entries:(Round two decimal places)
The rent payment made on June 17 was for June, July and August. Expense the amount associated with
one month's rent.
A Physical Inventory showed that only $236 worth of office supplies remained on hand as of June 30.
The annual interest rate on the mortgage payable was 8.50 percent. Interest expense for one-half month
should be computed because the building and land were purchased and the liability incurred on June 16.
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.
A review of Byte's job worksheets show that there are unbilled revenues in the amount of $5500 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
Office Equipment-7 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 $7000.The
Office Equipment has a scrap value of $400. 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 $606 are owed by Byte for three
days, June 28-30.
The Note Payable relating to the June 2, and 10 transactions is a five -year note, with interest at the rate of 12%
annually. Interest Expense should be computed based on 1 360 day year.
The original note on the computer equipment purchased on June 2 was $136000.On June10,eight days later,
$26000 was repaid. Interest expense calculated on the $120000 for eight days. In addition interest expense
on the $110000 balance of the loan($136000 less $26000=$110000) must be calculated for 20 days remaining in the
month of June.
Income taxes are to be calculated at the rate of 25% on net income before taxes.
Requirements:-
1) Prepare Journal Entries
2) Prepare T-Accounts
3) Prepare Unadjusted Trial Balance
4) Prepare adjusting Journal Entries
5) Prepare 10 column worksheet
6) Prepare Adjusting Trial Balance
7) Prepare Income Statement
8) Prepare statement of Owner's Equity
9) Prepare balance sheet
10) Prepare Post closing entries
11) Prepare Post closing Trial balance