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Byte of Accounting, Inc._Journal to Financial statements

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Question;Building Blocks of Accounting.. A Financial Perspective;Corey, when you are ready to have your work graded you will upload this file CM1991.xls or CM1991.xlsx;Byte of Accounting, Inc.;Corey Maida 2256;Transaction;Description;of transaction;01.;June 1: Byte of Accounting, Inc. issued 2,610;shares of its common stock to Jeremy after $23,100 in cash and computer;equipment with a fair market value of $34,320 were received.;02.;June 1: Byte of Accounting, Inc. issued 2,457;shares of its common stock after acquiring;from Courtney $42,900 in cash, computer equipment with a fair market;value of $10,120 and office equipment with a fair value of $1,034.;03.;June 1: Byte of Accounting, Inc. acquired $61,600;in cash from Corey Maida and issued 2,800 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 $500;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 $5,976 in cash. The effective date of the policy was June;16.;09.;June 16: Computer consultation revenue of $7,500 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.;11.;June 17: Cash of $3,200 was paid for rent for June;and July. Put the total amount into;the Prepaid Rent account.;12.;June 17: Received a bill of $250 from the local;newspaper for advertising.;13.;June 21: Billed;various miscellaneous local customers $4,500 for consulting services;performed.;14.;June 21: A fax machine for the office was purchased;for $850 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 $1,190 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 $3,605 was received;on billings.;20.;June 23: Purchased office supplies for $530 on;credit. Record the purchase as an;increase to the assets.;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 $1,015;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. [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 and July. Expense the amount associated with one;month's rent.;28.;A physical;inventory showed that only $214.00 worth of office supplies remained on hand;as of June 30.;29.;The annual interest rate on the mortgage payable was;7.50 percent. Interest expense for;one-half month should be computed because the building and land were;purchased and the liability incurred on June 16.;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 $5,125 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 $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 $621 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.];35.;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.];Closing;Entries;36.;Close the;revenue accounts.;37.;Close the;expense accounts.;38.;Close the;income summary account.;39.;Close the;dividends account.

 

Paper#37412 | Written in 18-Jul-2015

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