Byte Acc


  Byte of Accounting    

Description of transaction    
01. June 1:  Hudson Bloom invested $132,181.00 cash and computer equipment with a fair market value of $35,880.00 in his new business, Byte of Accounting.    
02. June 1:   Check # 5000 was used to purchased office equipment costing $1,081.00 from Office Express.  The invoice number was 87417.    
03. June 1:   Check # 5001 was used to purchased computer equipment costing $9,660.00 from Christina Cooley.  The invoice number was 20117.    
04. June 2:  Check # 5002 was used to make a down payment of $30,000.00 on additional computer equipment that was purchased from Royce Computers, invoice number 76542.  The full price of the computer was $150,000.00.  A five-year note was executed by Byte for the balance.    
05. June 4:  Additional office equipment costing $700.00 was purchased on credit from Discount Computer Corporation.  The invoice number was 98432.    
06. June 8:  Unsatisfactory office equipment costing $140.00 from invoice number 98432 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte.    
07. June 10:  Check # 5003 was used to make a $23,000.00 payment reducing the prinicpal owed on the June 2 purchase of computer equipment from Royce Computers.    
08. June 14: Check # 5004 was used to purchase a one-year insurance policy covering its computer equipment for $5,808.00 from Seth’s Insurance.  The effective date of the policy was June 16 and the invoice number was 2387.    
09. June 16:  A check in the amount of  $8,250.00 was received for services performed for Pitman Pictures.    
10. June 16:  Byte purchased a building and the land it is on for $107,000.00 to house its repair facilities and to store computer equipment.  The lot on which the building is located is valued at $17,000.00.  The balance of the cost is to be allocated to the building.  Check # 5005 was used to make the down payment of $10,700.00.  A thirty year mortgage with an inital payement due on August 1st, was established for the balance.    
11. June 17:  Check # 5006 for $5,100.00 was paid for rent of the office space for June, July and August.      
12. June 17:  Received invoice number 26354 in the amount of $275.00 from the local newspaper for advertising.    
13. June 21: Billed various miscellaneous local customers $4,700.00 for consulting services performed.    
14. June 21:  Check # 5008 was used to purchase a fax machine for the office from Office Machines Express for $650.00.  The invoice number was 975-328.     
15. June 21:  Accounts payable in the amount of $560.00 were paid with Check # 5007.    
16. June 22:  Check # 5010 was used to pay the advertising bill that was received on June 17.    
17. June 22:  Received a bill for $1,290.00 from Computer Parts and Repair Co. for repairs to the computer equipment.  The invoice number was 43254.    
18. June 22:  Check # 5009 was used to pay salaries of $860.00 to equipment operators for the week ending June 18.  Ignore payroll taxes.    
19. June 23:  Cash in the amount of $3,765.00 was received on billings.    
20. June 23:  Purchased office supplies for $605.00 from Staples on account.  The invoice number was 65498.    
21. June 28:  Billed $5,700.00 to miscellaneous customers for services performed to June 25.    
22. June 29:  Cash in the amount of $5,400.00 was received for billings.    
23. June 29:  Paid the bill received on June 22, from Computer Parts and Repairs Co with Check # 5011.    
24. June 29:  Check # 5012 was used to pay salaries of $860.00 to equipment operators for the week ending June 25.  Ignore payroll taxes.    
25. June 30:  Received a bill for the amount of $1,015.00 from O & G Oil and Gas Co.  The invoice number was 784537.    
26. June 30:  Check # 5013 was used to pay for airline tickets of  $1,900.00  to send the kids to Grandma Ellen for the July 4th holiday.    
  Adjusting Entries – Round to two decimal places.     
27. The rent payment made on June 17 was for June, July and August.  Expense the amount associated with one month’s rent.    
28. A physical inventory showed that only $247.00 worth of office supplies remained on hand as of June 30.    
29. 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.    
30. Record a journal entry to reflect that one half month’s insurance has expired.      
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.    
  The fixed assets have estimated useful lives as follows:    
  Building – 31.5 years    
  Computer Equipment – 5.0 years    
32. 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 $7,500. The office equipment has a scrap value of $300.  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 $516.00 are owed by  Byte for three days, June 28 – 30.  Ignore payroll taxes.    
34. The note payable to Royce Computers (transactions 04 and 07) 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.    
  Closing Entries    
35. Close the revenue accounts.    
36. Close the expense accounts.    
37. Close the income summary account.    
38. Close the withdrawals account.    
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