Question

A Byte of Accounting, Inc. d Balance Sheet As of June 22, 2018    Assets Current Assets 1110 Cash 1120 Accounts Receivable 1130 Prepaid Insurance 1140 Prepaid Rent 1150 Office Supplies Total Long-Term Assets 1211 Office Equip. 1212 Accum. Depr.-Office Equip. 1311 Computer Equip. 1312 Accum. Depr.-Computer Equip. 1411 Building Cost 1412 Accum. Depr.-Building 1510 Land Total Total Assets Liabilities Current Liabilities 2101 Accounts Payable 2102 Advanced Payment 2103 Interest Payable 2105 Salaries Payable 2106 Income Taxes Payable Total Long-Term Liabilities 2201 Mortgage Payable 2202 Notes Payable Total Total Liabilities Stockholder's Equity 3100 Capital Stock 3200 Retained Earnings Total Total Liabilities and Stockholder's Equity 1 You must finish the worksheet before you can complete the Balance Sheet, see FAQ 02. 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.]

Answer 1

BYTE OF ACCOUNTING Inc.
Balance Sheet
as at June 30, 2018
Assets
Current Assets
Cash		99487
Accounts Receivable		12430
Prepaid Insurance		4761
Prepaid Rent		2400
Office Supplies		202
Current Assets		119280
Office Equipment	1968
Accumulated Depr. - Office Equipment	20	1948
Computer Equipment	212930
Accumulated Depr. - Computer Equipment	3549	209381
Building	100000
Accumulated Depr. - Building	242	99758
Land		19000
Total Assets		449367
Liabilities and stockholders' equity
Current Liabilities
Accounts Payable		1420
Interest Payable		1460
Salaries Payable		621
Income Tax Payable		2282
Dividends Payable		1604
Current Liabilities		7387
Mortgage Payable		107100
Notes Payable		97000
Total Liabilities		211487
Stockholders' Equity
Capital Stock		232638
Retained Earnings
Net income	6846
Dividends	1604
Balance as at June 30, 2018		5242
Total Stockholders' Equity		237880
Total Liabilities and Stockholders' Equity		449367
Depreciation Expense:
Buildings   - (100,000-8,500)    (91,500/31.5)/12	242
Office Equipment (1,968 - 300)     (1,668 /7 / 12)	20
Computer equipment (212,930 / 5 /12)	3549
Total Depreciation	3811
Interest on note payable
On 120,000 for 10 days @12% pa	400
On 97,000 for 10 days @12% pa	647
	1047
Interest on mortgage loan (107,100 x 9.25% / 24)	413
Total interest	1460

BYTE OF ACCOUNTING Inc.
Worksheet for Trial Balance for the month of June 30, 2018
Account	Transactions		Unadjusted		Adjustments		Adjusted		Income statement		Balance Sheet
	Debit	Credit			Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	178805	79318	99487				99487				99487
Accounts Receivable	10205	3525	6680		5750		12430				12430
Prepaid Insurance	4968		4968			207	4761				4761
Prepaid Rent	4800		4800			2400	2400				2400
Office Supplies	505		505			303	202				202
Office Equipment	1968		1968				1968				1968
Accumulated Depr. - Office Equipment				0		20		20				20
Computer Equipment	212930		212930				212930				212930
Accumulated Depr. - Computer Equipment				0		3549		3549				3549
Building	100000		100000				100000				100000
Accumulated Depr. - Building				0		242		242				242
Land	19000		19000				19000				19000
Accounts Payable	1780	3200		1420				1420				1420
Advance Payment				0				0				0
Interest Payable				0		1460		1460				1460
Salaries Payable				0		621		621				621
Income Tax Payable				0		2282		2282				2282
Dividends Payable		1604		1604				1604				1604
Mortgage Payable		107100		107100				107100				107100
Notes Payable	23000	120000		97000				97000				97000
Capital Stock		232638		232638				232638				232638
Retained Earnings				0				0				5242
Dividends	1604		1604				1604
Consultation Revenue		16705		16705		5750		22455		22455
Advertising Expense	325		325				325		325
Salaries Expense	2070		2070		621		2691		2691
Rent Expense			0		2400		2400		2400
Repair Expense	1215		1215				1215		1215
Insurance Expense			0		207		207		207
Depreciation Expense			0		3811		3811		3811
Bad Debt Expense			0				0		0
Office Supplies Expense			0		303		303		303
Utilities Expense	915		915				915		915
Interest Expense			0		1460		1460		1460
Income Tax Expense			0		2282		2282		2282
Total	564090	564090	456467	456467	16834	16834	470391	470391	15609	22455	453178	453178
Income Summary									6846
Grand total	564090	564090	456467	456467	16834	16834	470391	470391	22455	22455	453178	453178