Question

	Description of transaction
01.	June 1: Hudson Bloom invested $164,684.00 cash and computer equipment with a fair market value of $40,560.00 in his new business, Byte of Accounting.
02.	June 1:   Check # 5000 was used to purchased office equipment costing $1,144.00 from Office Express. The invoice number was 87417.
03.	June 1:   Check # 5001 was used to purchased computer equipment costing $12,480.00 from Taylor Jones. The invoice number was 20117.
04.	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.
05.	June 4: Additional office equipment costing $400.00 was purchased on credit from Discount Computer Corporation. The invoice number was 98432.
06.	June 8: Unsatisfactory office equipment costing $80.00 from invoice number 98432 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte.
07.	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.
08.	June 14: Check # 5004 was used to purchase a one-year insurance policy covering its computer equipment for $5,304.00 from Seth's Insurance. The effective date of the policy was June 16 and the invoice number was 2387.
09.	June 16: A check in the amount of $8,000.00 was received for services performed for Pitman Pictures.
10.	June 16: Byte purchased a building and the land it is on for $107,000.00 to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $17,000.00. The balance of the cost is to be allocated to the building. Check # 5005 was used to make the down payment of $10,700.00. A thirty year mortgage with an inital payement due on August 1st, was established for the balance.
11.	June 17: Check # 5006 for $6,000.00 was paid for rent of the office space for June, July and August.
12.	June 17: Received invoice number 26354 in the amount of $350.00 from the local newspaper for advertising.
13.	June 21: Billed various miscellaneous local customers $4,400.00 for consulting services performed.
14.	June 21: Check # 5008 was used to purchase a fax machine for the office from Office Machines Express for $850.00. The invoice number was 975-328.
15.	June 21: Accounts payable in the amount of $320.00 were paid with Check # 5007.
16.	June 22: Check # 5010 was used to pay the advertising bill that was received on June 17.
17.	June 22: Received a bill for $1,140.00 from Computer Parts and Repair Co. for repairs to the computer equipment. The invoice number was 43254.
18.	June 22: Check # 5009 was used to pay salaries of $860.00 to equipment operators for the week ending June 18. Ignore payroll taxes.
19.	June 23: Cash in the amount of $3,525.00 was received on billings.
20.	June 23: Purchased office supplies for $630.00 from Staples on account. The invoice number was 65498.
21.	June 28: Billed $6,120.00 to miscellaneous customers for services performed to June 25.
22.	June 29: Cash in the amount of $5,799.00 was received for billings.
23.	June 29: Paid the bill received on June 22, from Computer Parts and Repairs Co with Check # 5011.
24.	June 29: Check # 5012 was used to pay salaries of $860.00 to equipment operators for the week ending June 25. Ignore payroll taxes.
25.	June 30: Received a bill for the amount of $790.00 from O & G Oil and Gas Co. The invoice number was 784537.
26.	June 30: Check # 5013 was used to pay for airline tickets of $2,300.00 to send the kids to Grandma Ellen for the July 4th holiday.
	Adjusting Entries - Round to two decimal places.
27.	The rent payment made on June 17 was for June, July and August. Expense the amount associated with one month's rent.
28.	A physical inventory showed that only $259.00 worth of office supplies remained on hand as of June 30.
29.	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 16.
30.	Record a journal entry to reflect that one half month's insurance has expired.
31.	A review of Byte’s job worksheets show that there are unbilled revenues in the amount of $5,250 for the period of June 28-30.
	The fixed assets have estimated useful lives as follows:
	Building - 31.5 years
	Computer Equipment - 5.0 years
32.	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 $8,000. The office equipment has a scrap value of $400. 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 $516.00 are owed by Byte for three days, June 28 - 30. Ignore payroll taxes.
34.	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.
	Closing Entries
35.	Close the revenue accounts.
36.	Close the expense accounts.
37.	Close the income summary account.
38.	Close the withdrawals account.

Answer 1

S No	Date	Account	Debit	Credit
1	Jun 1	Cash	164684
1	Jun 1	Computer Equipment	40560
1	Jun 1	Capital, Hudson Bloom		205244
2	Jun 1	Office Equipment	1144
2	Jun 1	Cash		1144
3	Jun 1	Computer Equipment	12480
3	Jun 1	Cash		12480
4	Jun 2	Computer Equipment	180000
4	Jun 2	Note payable		144000
4	Jun 2	Cash		36000
5	Jun 4	Office Equipment	400
5	Jun 4	Accounts Payable		400
6	Jun 8	Accounts Payable	80
6	Jun 8	Office Equipment		80
7	Jun 10	Note payable	27500
7	Jun 10	Cash		27500
8	Jun 14	Prepaid Insurance	5304
8	Jun 14	Cash		5304
9	Jun 16	Cash	8000
9	Jun 16	Earned Fee Revenue		8000
10	Jun 16	Land	17000
10	Jun 16	Building	90000
10	Jun 16	Cash		10700
10	Jun 16	Mortgage payable		96300
11	Jun 17	Prepaid Rent	6000
11	Jun 17	Cash		6000
12	Jun 17	Advertising Expense	350
12	Jun 17	Accounts Payable		350
13	Jun 21	Accounts Receivable	4400
13	Jun 21	Earned Fee Revenue		4400
14	Jun 21	Fax Machine	850
14	Jun 21	Cash		850
15	Jun 21	Accounts Payable	320
15	Jun 21	Cash		320
16	Jun 22	Accounts Payable	350
16	Jun 22	Cash		350
17	Jun 22	Repair Expense	1140
17	Jun 22	Accounts Payable		1140
18	Jun 22	Salaries Expense	860
18	Jun 22	Cash		860
19	Jun 23	Cash	3525
19	Jun 23	Accounts Receivable		3525
20	Jun 23	Office Supplies	630
20	Jun 23	Accounts Payable		630
21	Jun 28	Accounts Receivable	6120
21	Jun 28	Earned Fee Revenue		6120
22	Jun 29	Cash	5799
22	Jun 29	Accounts Receivable		5799
23	Jun 29	Accounts Payable	1140
23	Jun 29	Cash		1140
24	Jun 29	Salaries Expense	860
24	Jun 29	Cash		860
25	Jun 30	Fuel Expense	790
25	Jun 30	Accounts Payable		790
26	Jun 30	Withdrawal, Hudson	2300
26	Jun 30	Cash		2300
		Adjusting Entries
1	Jun 30	Rent Expense (6000/3)	2000
1	Jun 30	Prepaid Rent		2000
2	Jun 30	Office Supply Expense 630-259	371
2	Jun 30	Office Supplies		371
3	Jun 30	Interest Expense (96300*7%*half month)	281
3	Jun 30	Interest Payable		281
4	Jun 30	Insurance Expense (5304 for a year, for half a month=5304/24)	221
4	Jun 30	Prepaid Insurance		221
5	Jun 30	Unearned Fees	5250
5	Jun 30	Earned Fee Revenue		5250
6	Jun 30	Interest Expense	1237
6	Jun 30	Interest Payable		1237
6	Jun 30
6	Jun 30	Salaries Expense	516
6	Jun 30	Salaries Payable		516
7	Apr 30	Depreciation Expense	4114
7	Apr 30	Accumulated Depcreciation		4114
		Closing Entries
	Apr 30	Earned Fee Revenue	23770
	Apr 30	Income Summary		23770
		(closing Revenue Account)
	Apr 30	Income Summary	12739
	Apr 30	Salaries Expense		2236
	Apr 30	Advertising Expense		350
	Apr 30	Repair Expense		1140
	Apr 30	Fuel Expense		790
	Apr 30	Rent Expense (6000/3)		2000
	Apr 30	Office Supply Expense 630-259		371
	Apr 30	Interest Expense (96300*7%*half month)		281
	Apr 30	Insurance Expense (5304 for a year, for half a month=5304/24)		221
	Apr 30	Interest Expense		1237
	Apr 30	Depreciation Expense		4114
		(Closing Expense Account)
	Apr 30	Income Summary	11031
	Apr 30	Retained Earning		11031
		(Closing Income Summary account)
	Apr 30	Capital, Hudson	2300
	Apr 30	Withdrawal, Hudsan		2300
		(Closing Withdrawal Account)
	Interest Working
		144000*12%*7/360	336
		117500*12%*23/360	901
	Depreciation
			Cost	Salvage Value	Life	Annual Dep=(Cost-Salvage)/Life	Month Dep
		Building	90000	8000	31.5	2603	217
		Office Equipment	1464	400	7	152	13
		Computer Equipment	233040	0	5	46608	3884