Question

#29 says the annual interest rate on the mortgage payable was 7.00 percent. Interest expense for one-half month should be computed because the building and land were purchased and the liability incurred on June 16th.  #19 says purchased office supplies for $605 on credit. Record the purchase as an increase to the assets.

I only need help with #'s 27-39

Transaction Description of transaction June 1: Byte of Accounting, Inc. acquired $50,000 in cash from Lauryn and issued 2,000 shares of its common stock. June 1: Byte of Accounting, Inc. issued 2,550 shares of its common stock to Kelsie Kimmons after $26,750 in cash and computer equipment with a fair market value of $37,000 were received. 02 June 1: Byte of Accounting, Inc. issued 2,425 shares of its common stock after acquiring from Courtney $46,250 in cash, computer equipment with a fair market value of $13,500 and office equipment with a fair value of $875 03 June 2: A down payment of $36,000 in cash was made on additional computer equipment that was purchased for $180,000. A five-year note was executed by Byte for the balance 04 June 4: Additional office equipment costing $300 was purchased on credit from Discount Computer Corporation. 05 June 8: Unsatisfactory office equipment costing $60 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte 06 June 10: Byte paid $27,500 on the balance it owed on the June 2 purchase of computer equipment. 07 June 14: A one-year insurance policy covering its computer equipment was purchased by Byte for $5,808 in cash. The effective date of the policy was June 16 08 June 16: A check in the amount of $6,750 was received for consulting revenue 09 June 16: Byte purchased a building and the land it is on for $95,000, to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $15,000. The balance of the cost is to be allocated to the building. Byte made a cash down payment of S9,500 and executed a mortgage for the balance. The mortgage is payable in eight equal annual installments beginning July 1 10. June 17: Cash of S4,200 was paid for rent for June and July. Put the total amount into the Prepaid Rent account. June 17: Received a bill of $325 from the local newspaper for advertising. une 21: Accounts payable in the amount of $240 were paid. June 21: A fax machine for the office was purchased for $850 cash. 12. 13. 14 June 21: Billed various miscellaneous local customers $4,500 for consulting services performed. 15 June 22: Paid salaries of $1,010 to equipment operators for the week ending June 18 16. June 22: Received a bill for $1,290 from Computer Parts and Repair Co. for repairs to the computer equipment. 18.June 22: Paid the advertising bill that was received on June 17 19 June 23: Cash in the amount of $3,605 was received on billings 20 June 28: Billed S5,280 to miscellaneous customers for services performed to June 25 2.1 June 29: Paid the bill received on June 22, from Computer Parts and Repairs Co June 29: Cash in the amount of S5,001 was received for billings June 29: Paid salaries of S1,010 to equipment operators for the week ending June 25 2:3 24. 25.June 30:Received a bill for the amount of $915 from O&G Oil and Gas Co June 30: Paid a cash dividend of $0.15 per share to the three shareholders of Byte. [IMPORTANT transactions.] 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 26. NOTE: The number of shares of capital stock outstanding can be determined from the first three 27 month's rent A physical inventory showed that only $247.00 worth of office supplies remained on hand as of June 30 29. month should be computed because the building and land were purchased and the liability incurred 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. 30. A review of Byte's job worksheets show that there are unbilled revenues in the amount of $5,625 for the period of June 28-30 31 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 32 A review of the payroll records show that unpaid salaries in the amount of $606.00 are owed by Byte for three days, June 28 30 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 $144,000. On June 10, eight days later, $27,500 was repaid. Interest expense must be calculated on the $144,000 for eight days. In addition, interest expense on the S116,500 balance of the loan (S144,000 less $27,500 $116,500) must be calculated for the 20 days remaining in the month of June.] 34 Income taxes are to be computed at the rate of 25 percent of net income before taxes 35 [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 Close the revenue accounts 36 37 Close the expense accounts 38. Close the income summary account. 39 Close the dividends account.

Answer 1

Ref

Account Title

Debit

Credit

27

Rent expense

$2,100

(4200/2)

Prepaid rent

$2,100

28

Office Supplies expense

$558

(805-247)

Office Supplies

$558

(Note: Amount of office supplies purchased on June23, is not clear:assumed $805

29

Interest expense

$2,993

(95000-9500)*7%*(1/2)

Interest payable

$2,993

30

Insurance Expense

$242

(5808/12)*(1/2)

Prepaid Insurance

$242

31

Accounts Receivable

$5,625

Service Revenue

$5,625

32

Depreciation -Building

$189

Cost=(95000-15000)=80000

((80000-8500)/31.5)*(1/12)

Depreciation -Computer Equipment

$3,842

((37000+13500+180000)/5)*(1/12)

Depreciation -Office equipment

$10

(((875+300-60)-300)/7)*(1/12)

Accumulated Depreciation-Building

$189

Accumulated Depreciation-computer Equp

$3,842

Accumulated Depreciation-Office Equp

$10

33

Salaries expense

$606

Salaries Payable

$606

34

Interest expense

$1,161

(144000*0.12*(8/360)+116500*0.12*(20/360)

Interest payable

$1,161

39

Retained Earnings

$1,046

(0.15*(2000+2550+2425))

Dividend

$1,046

Note ;

For 35 Net Income is required

Calculate tax=25% of Net income

Tax Expense …..Dr

Taxes Payable ……………..Cr

For 36 and 37 Trial balance is required

For 36

Revenue Account …….Dr

Income summary………………….Cr

For 37

income summary……….Dr

Expense account………………………..Cr

For 38 Income summary is required

Net Income………….Dr

Retained Earnings……………Cr