Question

A Byte of Accounting, Inc.
Statement of Changes in Retained Earnings
For Month Ending June 22, 2018
		Total
Balance, Beginning of Period
Net Income
Dividends
Balance, End of Period
		need to fill it out this is the data: 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. 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. 03. June 1:   Byte of Accounting, Inc. acquired $87,000 in cash from angel and issued 3,000 shares of its common stock. 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. 05. June 4: Additional office equipment costing $300 was purchased on credit from Discount Computer Corporation. 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. 07. June 10: Byte paid $23,000 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 $4,968 in cash. The effective date of the policy was June 16. 09. June 16: Computer consultation revenue of $6,500 was received. 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. 11. June 17: Cash of $4,800 was paid for rent for June and July. Put the total amount into the Prepaid Rent account. 12. June 17: Received a bill of $325 from the local newspaper for advertising. 13. June 21: Billed various miscellaneous local customers $4,400 for consulting services performed. 14. June 21: A fax machine for the office was purchased for $800 cash. 15. June 21: Accounts payable in the amount of $240 were paid. 16. June 22: Paid the advertising bill that was received on June 17. 17. June 22: Received a bill for $1,215 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 $3,525 was received on billings. 20. June 23: Purchased office supplies for $505 on credit. Record the purchase as an increase to the assets. 21. June 28: Billed $5,805 to miscellaneous customers for services performed to June 25. 22. June 29: Cash in the amount of $5,500 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 $915 from O & G Oil and Gas Co. 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.] 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 $202.00 worth of office supplies remained on hand as of June 30. 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. 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 $5,750 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 $8,500. 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 $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 $120,000.   On June 10, eight days later, $23,000 was repaid. Interest expense must be 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.] 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

Answer 1

JOURNAL:

S.NO.	DATE	PARTICULARS	DESCRIPTION	DEBIT	CREDIT
1	JUNE 1	CASH	ISSUE OF COMMON STOCK	$31.030
		COMPUTER EQUIPMENT	ISSUE OF COMMON STOCK	$45,530
		CAPITAL STOCK	ISSUE OF COMMON STOCK(2640 SHARESX $29 )		$76,560
2	JUNE 1	CASH	ISSUE OF COMMON STOCK	$50,750
		COMPUTER EQUIPMENT	ISSUE OF COMMON STOCK	$17,400
		OFFICE EQUIPMENT	ISSUE OF COMMON STOCK	$928
		CAPITAL STOCK	ISSUE OF COMMON STOCK(2,382 SHARES X $29)		$69,078
3	JUNE 1	CASH	ISSUE OF COMMON STOCK	$87,000
		CAPITAL STOCK	ISSUE OF COMMON STOCK(3,000 SHARES X $29)		$87,000
4	JUNE 2	COMPUTER EQUIPMENT	PURCHASE OF COMPUTER	$150,000
		CASH			$30,000
		NOTES PAYABLE			$120,000
5	JUNE 4	OFFICE EQUIPMENT	PURCHASE OFFICE EQUIPMENT	$300
		ACCOUNTS PAYABLE			$300
6.	JUNE 8	ACCOUNTS PAYABLE	RETURN OFFICE EQUIPMENT	$60
		OFFICE EQUIPMENT			$60
7.	JUNE 10	NOTES PAYABLE	PAYMENT OF COMPUTER EQUIPMENT	$23,000
		CASH			$23,000
8	JUNE 14	PRE-PAID INSURANCE	COMPUTER INSURANCE	$4,968
		CASH			$4,968
9.	JUNE 16	CASH	COMPUTER CONSULTANCY REVENUE	$6,500
		COMPUTER & CONSULTING SERVICES			$6,500
10	JUN 16	BUILDING COST	PURCHASE OF LAND AND BUILDING	$19,000
		LAND		$100,000
		CASH			$11,900
		MORTGAGE PAYABLE			$107,100
11.	JUNE 17	PREPAID RENT	PAYMENT OF RENT	$4,800
		CASH			$4,800
12.	JUNE 17	ADVERTISING EXPENSE	ADVERTISING EXPENSE	$325
		ACCOUNTS PAYABLE			$325
13.	JUNE 21	ACCOUNTS RECEIVABLE	CONSULTING REVENUE	$4,400
		COMPUTER & CONSULTING SERVICES			$4,400
14.	JUNE 21	OFFICE EQUIPMENT	PURCASE OF FAX MACHINE	$800
		CASH			$800
15.	JUNE 21	ACCOUNTS PAYABLE	PAYMENT OF ACCOUNTS PAYABLE	$240
		CASH			$240
16.	JUNE 22	ACCOUNTS PAYABLE	PAYMENT OF ADVERTISING EXPENSES	$325
		CASH			$325
17.	JUNE 22	REPAIRS AND MAINTENANCE EXPENSES	COMPUTER REPAIRING FEE	$1,215
		ACCOUNTS PAYABLE			$1,215
18.	JUNE 22	SALARY EXPENSE	SALARY PAYMENT	$1,035
		CASH			$1,035
19.	JUNE 23	CASH	RECIEVE PAYMENT	$3,525
		ACCOUNTS RECEIVABLE			$3,525
20	JUNE 23	OFFICE SUPPLIES	PURCAHSE OF OFFICE SUPPLIES	$505
		ACCOUNTS PAYABLE			$505
21	JUNE 28	ACCOUNTS RECEIVABLE	RECORD OF REVENUE	$5,805
		COMPUTER AND CONSULTING SERVICES			$5,805
22	JUNE 29	CASH	RECEIVED PAYMENT	$5,500
		ACCOUNTS RECEIVABLE			$5,500
23	JUNE 29	ACCOUNTS PAYABLE	PAYMENT OF COMPUTER REPAIR	$1,215
		CASH			$1,215
24	JUNE 29	SALARY EXPENSE	SALARY PAYMENT	$1,035
		CASH			$1,035
25	JUNE 30	OIL & GAS EXPENSE	OIL AND GAS EXPENSE	$915
		ACCOUNTS PAYABLE			$915
26	JUNE 30	DIVIDENDS	DIVEIDEND PAID(8022 SHARES * $0.20 PER SHARE)	$1604.40
		CASH			$1604.40
27.	JUNE 30	RENT EXPENSE	RENT EXPENSE RECOGNISED	$2,400
		PREPAID RENT			$2,400
28.	JUNE 30	SUPPLIES EXPENSE	SUPPLIES EXPENSE	$202
		OFFICE SUPPLIES			$202
29.	JUNE 30	INTEREST EXPENSE	INTEREST ADJUSTMENT($107100*9.25%*1/12*1/2)	$412.78
		INTEREST PAYABLE			$412.78
30.	JUNE 30	INSURANCE EXPENSE	INSURANCE ADJUSTMENT($4,968*1/12*1/2)	$207
		PREPAID INSURANCE			$207
31	JUNE 30	ACCOUNTS RECEIVABLE	UNBILLED REVENUE	$5,750
		COMPUTER & CONSULTING SERVICES			$5,750
32.	JUNE 30	DEPRICIATION EXPENSE	ADJUST DEPRICIATION	$3,596.47
		ACCUMULATED DEPRICIATION-COMPUTER			$3548.83
		ACCUMULTATED DEPRICIATION OFFICE EQUIPMENT			$19.86
		ACCUMULATED DEPRICIATION-BUILDING			$27.78
33.	JUNE 30	SALARY EXPENSE	SALARY EXPENSE	$621
		SALARY PAYABLE			$621
34.	JUNE 30	INTEREST EXPENSE	INTEREST ADJUSTMENT	$966.67
		INTEREST PAYABLE	(120000*12%*8/360+97000*12%*20/360)		$966.67
35.	JUNE 30	INCOME TAX EXOENSE	INCOME TAX	$2,381.02
		INCOME TAX PAYABLE			$2,381.02
		CLOSING ENTRIES
36.	JUNE 30	COMPUTER AND CONSULTING SERVICES	CLSOING REVENUE	$22,455
		INCOME SUMMARY			$22,455
37.	JUNE 30	INCOME SUMMARY	CLOSING EXPENSE	$15,311.94
		RENT EXPENSE			$2,400
		SALARY EXPNESE			$2,691
		ADVERTISEMENT EXPENSES			$325
		REPAIR & MAINTENANCE			$1,215
		OIL AND GAS EXPENSES			$915
		SUPPLIES EXPENSES			$202
		INTEREST EXPENSE			$1,379.45
		INSURANCE EXPENSES			$207
		DEPRICIATION EXPENSE			$3,596.47
		INCOME TAXES			$2,381.02
38.	JUNE 30	INCOME SUMMARY	CLOSING RETAINED EARNINGS	$7,143.06
		RETAINED EARNINGS			$7,143.06
39.	JUNE 30	RETAINED EARNINGS	CLOSING DIVIDENDS	$1,604.40
		DIVIDEND			$1,604.40

INCOME STATEMENT
SALES(6500+4400+5805+5750)	$22,455
LESS:EXPENSES
RENT EXPENSE	$2,400
SALARY EXPNESE(1,035+1,035+621)	$2,691
ADVERTISEMENT EXPENSES	$325
REPAIR & MAINTENANCE	$1,215
OIL AND GAS EXPENSES	$915
SUPPLIES EXPENSES	$202
INTEREST EXPENSE(412.78+966.67)	$1,379.45
INSURANCE EXPENSES	$207
DEPRICIATION EXPENSE	$3596.47
NET INCOME BEFORE TAXES	$9,524.08
LESS: INCOME TAXES @ 25%	$2,381.02
INCOME AFTER TAX	$7,143.06

STATEMENT OF CHANGES IN RETAINED EARNINGS
OPENING BALANCE	$0
NET INCOME	$7,143.06
DIVIDENS	$1,604.40
BALANCE END OF PERIOD	$5,538.66

NOTE:ARITHMETIC ACCURANCY HAS BEEN MAINTAINED , AS IT IS A LONG QUESTION,KINDLY CHECK CALCULATIONS AND MAKE CHANGES WHEREVER NECESSARY