Reference no: EM132645311

Problem 1: Creating a general Journal with this information:

June 1: Jeremy made an investment in Byte of Accounting, Inc., by purchasing 2,630 shares of its common stock paying $33,011.00 in cash and by contributing computer equipment with a fair market value of $45,915.30. The par value of the common stock was $0.01 per share.

June 1: Courtney made an investment in Byte of Accounting, Inc., by purchasing 561 shares of its common stock by contributing computer equipment with a fair market value of $15,605.20 and office equipment with a fair value of $1,230.41. The par value of the common stock was $0.01 per share.

June 1: Clair made an investment in Byte of Accounting, Inc. by purchasing 4,150 shares of its common stock for $124,541.50 cash. The par value of the common stock was $0.01 per share.

June 1: Alissa McGraw made an investment in Byte of Accounting, Inc. by purchasing 4,150 shares of its common stock for $124,541.50 cash. The par value of the common stock was $0.01 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 principal 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 $8,510.00 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 inital payement due on August 1st, was established for the balance.

June 17: Check # 5006 for $6,900.00 was paid for rent of the office space for June, July and August.

June 17: Received invoice number 26354 in the amount of $475.00 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 $825.00. 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 $1,240.00 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 $960.00 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 $45.00 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 $960.00 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 Alissa McGraw 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, July and August. 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.

Problem 2: 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 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 $7,500.00. 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 $576.00 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.]

Problem 3: Based on the information on the "Bank Reconciliation" sheet prepare the journal entry required to increases cash.

Problem 4: Based on the information on the "Bank Reconciliation" sheet prepare the journal entry required to decreases cash.