For Period Ending January 0, 1900
|
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
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
1120
|
Accounts Receivable
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
1121
|
Allowance for Doubtful Accounts
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
1130
|
Prepaid Insurance
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
1140
|
Prepaid Rent
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
1150
|
Office Supplies
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
1211
|
Office Equip.
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
1212
|
Accum. Depr.-Office Equip.
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
1311
|
Computer Equip.
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
1312
|
Accum. Depr.-Computer Equip.
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
1411
|
Building Cost
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
1412
|
Accum. Depr.-Building
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
1510
|
Land
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
2101
|
Accounts Payable
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
2102
|
Advanced Payments
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
2103
|
Interest Payable
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
2105
|
Salaries Payable
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
2106
|
Income Taxes Payable
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
2201
|
Mortgage Payable
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
2202
|
Notes Payable
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
3100
|
Capital Stock
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
3110
|
Paid-in Capital in Excess of Par Value
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
3200
|
Retained Earnings
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
3300
|
Dividends
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
4100
|
Computer & Consulting Revenue
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
5010
|
Rent Expense
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
5020
|
Salary Expense
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
5030
|
Advertising Expense
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
5040
|
Repairs & Maint. Expense
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
5050
|
Oil & Gas Expense
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
5080
|
Supplies Expense
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
5090
|
Interest Expense
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
5100
|
Insurance Expense
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
5110
|
Depreciation Expense
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
5120
|
Bad Debt Expense
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
5130
|
Bank Expense
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
5140
|
Telephone Expense
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
5150
|
Income Taxes Expense
|
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
0
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
NET INCOME
|
|
|
|
|
|
|
|
|
|
|
|
Balance
|
|
|
|
|
|
|
|
|
|
|
June 1: Jeremy made an investment in Byte of Accounting, Inc., by purchasing 2,630 shares of its common stock paying $41,800 in cash and by contributing computer equipment with a fair market value of $58,140. The par value of the common stock was $22 per share.
June 1: Courtney made an investment in Byte of Accounting, Inc., by purchasing 541 shares of its common stock by contributing computer equipment with a fair market value of $19,000 and office equipment with a fair value of $1,558. The par value of the common stock was $22 per share.
June 1: LADAN OSMAN made an investment in Byte of Accounting, Inc. by purchasing 3,850 shares of its common stock for $146,300 cash. The par value of the common stock was $22 per share.
June 2: Check # 5002 was used to make a down payment of $36,000.00 on additional computer equipment that was purchased from Royce Computers, invoice number 76542. The full price of the computer was $180,000.00. A five-year note was executed by Byte for the balance.
June 4: Additional office equipment costing $500.00 was purchased on credit from Discount Computer Corporation. The invoice number was 98432.
June 8: Unsatisfactory office equipment costing $100.00 from invoice number 98432 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte.
June 10: Check # 5003 was used to make a $27,500.00 payment reducing the prinicpal owed on the June 2 purchase of computer equipment from Royce Computers.
June 10: Purchased office supplies for $1,700.00 from Staples on account. The invoice number was 61298. Included in the purchase was 10 units of Super RoutePro at a cost of $40.00 each.
June 14: Check # 5004 was used to purchase a one-year insurance policy covering its computer equipment for $5,472.00 from Seth's Insurance. The effective date of the policy was June 16 and the invoice number was 2387.
June 16: Checks in the amount of $8,760.00 was received for services performed for cash customers.
June 16: Byte purchased a building and the land it is on for $119,000.00 to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $19,000.00. The balance of the cost is to be allocated to the building. Check # 5005 was used to make the down payment of $11,900.00. A thirty year mortgage with an initalpayement due on August 1st, was established for the balance.
June 17: Check # 5006 for $4,600.00 was paid for rent for June and July.
June 17: Received invoice number 26354 in the amount of $250.00 from the local newspaper for advertising.
June 21: Billed various miscellaneous local customers $4,700.00 for consulting services performed.
June 21: Check # 5007 was used to purchase a fax machine for the office from Office Machines Express for $850.00. The invoice number was 975-328.
June 21: Accounts payable in the amount of $400.00 were paid with Check # 5008.
June 22: Check # 5009 was used to pay the advertising bill that was received on June 17.
June 22: Received a bill for $1,265.00 from Computer Parts and Repair Co. for repairs to the computer equipment. The invoice number was 43254.
June 22: Check # 5010 was used to pay salaries of $985.00 to equipment operators for the week ending June 18. Ignore payroll taxes.
June 23: Cash in the amount of $3,765.00 was received on billings.
June 23: Purchased office supplies for $850.00 from Staples on account. The invoice number was 65498. Included in the purchase was 10 units of Super RoutePro at a cost of $46.00 each.
June 28: Billed $5,805.00 to miscellaneous customers for services performed to June 25.
June 29: Cash in the amount of $5,500.00 was received for billings.
June 29: Paid the bill received on June 22, from Computer Parts and Repairs Co with Check # 5011.
June 29: Check # 5012 was used to pay salaries of $985.00 to equipment operators for the week ending June 25. Ignore payroll taxes.
June 30: Received a bill for the amount of $990.00 from O & G Oil and Gas Co. The invoice number was 784537.
June 30: Check # 5013 was used to pay for a cash dividend of $0.20 per share to Jeremy, a shareholder of Byte.
June 30: Check # 5014 was used to pay for a cash dividend of $0.20 per share to LADAN OSMAN a shareholder of Byte.
June 30: Check # 5015 was used to pay for a cash dividend of $0.20 per share to Courtney, a shareholder of Byte.
Adjusting Entries - Round to two decimal places.
The rent payment made on June 17 was for June and July. Expense the amount associated with one month's rent.
A physical inventory showed that only $358.00 worth of general office supplies remained on hand as of June 30. This did not include any of the Super RoutePro. There were 5 units of Super RoutePro on hand. We use FIFO to determine the valuation of the supplies.
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.
Record a journal entry to reflect that one half month's insurance has expired.
A review of Byte's job worksheets show that there are unbilled revenues in the amount of $15,375 for the period of June 28-30.
The fixed assets have estimated useful lives as follows:
The Building and the Office Equipment have the following estimated useful lives:
Building - 31.5 years
Office Equipment - 7.0 years
Management has decided that assets purchased during a month are treated as if purchased on the first day of the month. The building's salvage value is $8,000.00. The office equipment has a salvage value of $450.00. Calculate the depreciation for one month using the straight-line method of depreciation.
The Computer Equipment has an estimated useful life of 5.00 years.
Management has decided that assets purchased during a month are treated as if purchased on the first day of the month. The computer equipment's scrap value is $20,000.00. Calculate the depreciation for one month using the double declining method of depreciation.
A review of the payroll records show that unpaid salaries in the amount of $591.00 are owed by Byte for three days, June 28 - 30. Ignore payroll taxes.
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.
[IMPORTANT NOTE: The original note on the computer equipment purchased on June 2 was $144,000.00. On June 10, eight days later, $27,500.00 was repaid. Interest expense must be calculated on the $144,000.00 for eight days. In addition, interest expense on the $116,500.00 balance of the loan ($144,000.00 less $27,500.00 = $116,500.00) must be calculated for the 20 days remaining in the month of June.]
# 39. Based on the information on the "Bank Reconciliation" sheet prepare the journal entry required to increases cash.
#40. Based on the information on the "Bank Reconciliation" sheet prepare the journal entry required to decreases cash.
#41. Our CPA has informed us to estimate that 3.00% of Computer & Consulting Revenue will be uncollectable.
#42. 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
#43. Close the revenue accounts.
#44. Close the expense accounts.
#45. Close the income summary account.
Close the dividends account.