Question

	Adjusting Entries - Round to two decimal places.
27.	The rent payment made on June 17 (3600 )was for June and July. Expense the amount associated with one month's rent.
28.	A physical inventory showed that only $259.00 worth of office supplies remained on hand as of June 30.
29.	The annual interest rate on the mortgage payable was 9.00 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 $5,625.00 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 $500.00. The office equipment has a scrap value of $350.00. 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 $531.00 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.

Answer 1

SOLUTION:

Transaction	Date	Account	Particulars	Debit	Credit
27	42551	5010	Rent Exp.	$2,400.00
	42551	1140	Prepaid Rent		$2,400.00
28	42551	5080	Supplies Exp.	$371.00
	42551	1150	Office Supplies		$371.00
29	42551	5090	Interest Exp.	$393.00
	42551	2103	Interest Payable		$393.00
30	42551	5100	Insurance Exp.	$235.00
	42551	1130	Prepaid Insurance		$235.00
31	42551	1120	Accounts Receivable	$5,750.00
	42551	4100	Computer & Consulting Revenue		$5,750.00
32	42551	5110	Depreciation Exp.	$3,909.11
	42551	1212	Accum. Depr.-Office Equip.		$18.62
	42551	1312	Accum. Depr.-Computer Equip.		$3,618.00
	42551	1412	Accum. Depr.-Building		$272.49
33	42551	5020	Salary Exp.	$516.00
	42551	2105	Salaries Payable		$516.00
34	42551	5090	Interest Exp.	$1,096.00
	42551	2103	Interest Payable		$1,096.00
35	42551	5120	Income Tax Exp.	$2,337.47
	42551	2106	Income Taxes Payable		$2,337.47
36	42551	4100	Computer & Consulting Revenue	$22,370.00
36	42551	3400	Income Summary		$22,370.00
37	42551	3400	Income Summary	$15,357.58
	42551	5010	Rent Exp.		$2,400.00
	42551	5020	Salary Exp.		$2,236.00
	42551	5030	Advertising Exp.		$350.00
	42551	5040	Repairs & Maint. Exp.		$1,190.00
	42551	5050	Oil & Gas Exp.		$840.00
	42551	5080	Supplies Exp.		$371.00
	42551	5090	Interest Exp.		$1,489.00
	42551	5100	Insurance Exp.		$235.00
	42551	5110	Depreciation Exp.		$3,909.11
	42551	5120	Income Tax Exp.		$2,337.47
38	42551	3400	Income Summary	$7,012.42
	42551	3200	Retained Earnings		$7,012.42
39	42551	3200	Retained Earnings	$1,886.46
	42551	3300	Dividends		$1,886.46

Account		Unadjusted Trial Balance		Adjusting Entries		Adjusted Trial Balance		Income Statement		Balance Sheet
Number	Name	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
1110	Cash	$55,717.54				$55,717.54				$55,717.54
1120	Accounts Receivable	$1,116.00		$5,750.00		$6,866.00				$6,886.00
1130	Prepaid Insurance	$5,640.00			$235.00	$5,405.00				$5,405.00
1140	Prepaid Rent	$7,200.00			$2,400.00	$4,800.00				$4,800.00
1150	Office Supplies	$630.00			$371.00	$259.00				$259.00
1211	Office Equipment	$2,064.00				$2,064.00				$2,064.00
1212	Accum. Depreciation-Office Equipment				$18.62		$18.62				$18.62
1311	Computer Equipment	$217,080.00				$217,080.00				$217,080.00
1312	Accum. Depreciation-Computer Equipment				$3,618.00		$3,618.00				$3,618.00
1411	Building Cost	$110,000.00				$110,000.00				$110,000.00
1412	Accum. Depreciation-Building				$272.49		$272.49				$272.49
1510	Land	$21,000.00				$21,000.00				$21,000.00
2101	Accounts Payable		$1,470.00				$1,470.00				$1,470.00
2102	Advanced Payments
2103	Interest Payable				$1,489.00		$1,489.00				$1,489.00
2105	Salaries Payable				$516.00		$516.00				$516.00
2106	Income Taxes Payable				$2,337.47		$2,337.47				$2,337.47
2201	Mortgage Payable		$117,900.00				$117,900.00				$117,900.00
2202	Notes Payable		$110,000.00				$110,000.00				$110,000.00
3100	Capital Stock		$180,444.00				$180,444.00				$180,444.00
3200	Retained Earnings
3300	Dividends	$1,886.46				$1,886.46				$1,886.46
4100	Computer & Consulting Revenue		$16,620.00		$5,750.00		$22,370.00		$22,370.00
5010	Rent Exp			$2,400.00		$2,400.00		$2,400.00
5020	Salary Exp	$1,720.00		$516.00		$2,236.00		$2,236.00
5030	Advertising Exp	$350.00				$350.00		$350.00
5040	Repairs & Maint. Exp	$1,190.00				$1,190.00		$1,190.00
5050	Oil & Gas Exp	$840.00				$840.00		$840.00
5080	Supplies Exp			$371.00		$371.00		$371.00
5090	Interest Exp			$1,489.00		$1,489.00		$1,489.00
5100	Insurance Exp			$235.00		$235.00		$235.00
5110	Depreciation Exp			$3,909.11		$3,909.11		$3,909.11
5120	Income Tax Exp			$2,337.47		$2,337.47		$2,337.47
	TOTAL	$426,434.00	$426,434.00	$17,007.58	$17,007.58	$440,435.58	$440,435.58	$15,357.58	$22,370.00	$425,098.00	$418,065.58
	NET INCOME							$7,032.42			$7,032.42
								$22,370.00	$22,370.00	$425,098.00	$425,098.00

Income statement
Revenues
Computer & Consulting Revenue		$22,370.00
Exp.enses
Rent Exp.	$2,400.00
Salary Exp.	$2,236.00
Advertising Exp..	$350.00
Repair and Maint. Exp..	$1,190.00
Oil & Gas Exp.	$840.00
Supplies Exp.	$371.00
Interest Exp.	$1,489.00
Insurance Exp.	$235.00
Depreciation Exp.	$3,909.11
Total		$13,020.11
Net Income Before Tax		$13,020.11
Income Tax Exp..		$2,337.47
Net Income After Tax		10682.64

Retained Earnings
	Amount
Opening Balance	$180,444.00
Plus: Net Income	$10,682.64
	$191,126.64
Minus: Dividends	$1,886.46
Closing Balance	$189,240.18

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