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Almost finished my Acc Project.
Need help with Adjusting Entries( from #27-35). Please?? Due date is Tuesday.
My solutions : 27. Rent Expense Dr 2000 Prepaid Rent Cr 2000 30. Insurance Expense Dr.249 Prepaid Insurance Cr.249 31. Acc.Rec Dr.500 Revenue Cr.5000 Help with # 27-35. Problem: 01. June 1: Lauryn made an investment in Byte of Accounting, Inc. by purchasing 2,600 shares of its common stock for $62,400 cash. The par value of the common stock was $24 per share. 02. June 1: Jane made an investment in Byte of Accounting, Inc. by purchasing 2,520 shares of its common stock paying $24,960 in cash and by contributing computer equipment with a fair market value of $35,520. 03. June 1: Courtney made an investment in Byte of Accounting, Inc. by purchasing 2,600 shares of its common stock for $49,200 cash and by contributing computer equipment with a fair market value of $12,000 and office equipment with a fair value of $1,200. 04. June 2: A down payment of $32,000 in cash was made on additional computer equipment that was purchased for $160,000. A five-year note was executed by Byte for the balance. 05. June 4: Additional office equipment costing $600 was purchased on credit from Discount Computer Corporation. 06. June 8: Unsatisfactory office equipment costing $120 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte. 07. June 10: Byte paid $24,500 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 $5,976 in cash. The effective date of the policy was June 16. 09. June 16: A check in the amount of $8,250 was received for consulting revenue. 10. June 16: Byte purchased a building and the land it is on for $107,000, to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $17,000. The balance of the cost is to be allocated to the building. Byte made a cash down payment of $10,700 and executed a mortgage for the balance. The mortgage is payable in eight equal annual installments beginning July 1. 11. June 17: Cash of $6,000 was paid for rent for June, July and August. Put the total amount into the Prepaid Rent account. 12. June 17: Received a bill of $275 from the local newspaper for advertising. 13. June 21: Accounts payable in the amount of $480 were paid. 14. June 21: A fax machine for the office was purchased for $775 cash. 15. June 21: Billed various miscellaneous local customers $4,800 for consulting services performed. 16. June 22: Paid salaries of $1,035 to equipment operators for the week ending June 18. 17. June 22: Received a bill for $1,165 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: Purchased office supplies for $530 on credit. Record the purchase as an increase to the assets. 20. June 23: Cash in the amount of $3,845 was received on billings. 21. June 28: Billed $5,700 to miscellaneous customers for services performed to June 25. 22. June 29: Paid the bill received on June 22, from Computer Parts and Repairs Co. 23. June 29: Cash in the amount of $5,400 was received for billings. 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 $790 from O & G Oil and Gas Co. 26. June 30: Paid a cash dividend of $0.19 per share to the three shareholders of Byte. [IMPORTANT NOTE: The number of shares of capital stock outstanding can be determined by dividing the total dollar amount in the capital stock account by the par value of a share of stock.] Adjusting Entries 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 $214.00 worth of office supplies remained on hand as of June 30. 29. The annual interest rate on the mortgage payable was 8.50 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 $5,000 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 $7,000. The office equipment has a scrap value of $350. 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 $621.00 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 $128,000. On June 10, eight days later, $24,500 was repaid. Interest expense must be calculated on the $128,000 for eight days. In addition, interest expense on the $103,500 balance of the loan ($128,000 less $24,500 = $103,500) 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.] |
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The entries you have so far are correct, expect for your Accounts Receivable amount should be $5,000 (looks like a typo).
For number 28 you need to compute the amount for the adjusting entry. So take your Office Supplies account balance from your trial balance minus your actual inventory amount to get your adjusting inventory amount. Your accounts will be Office Supplies Expense and Office Supplies. For number 29 you have to compute the amount of interest owed. So take your mortgage payable amount times 8.5% to get your annual amount. Now divide this number by 12 to get your monthly rate and finally divide this number by 2 to get your half month amount. Your accounts are Interest Expense and Interest Payable. For number 32 you have to compute the depreciation amount for your 3 items then add the amounts together to get your total depreciation amount. The formula to get your depreciation for straight line is: The cost of the item minus the scrap or salvage value to get your depreciable base. Now take the depreciable base divided by number of years useful life to get your annual depreciation amount. Now take your annual amount divided by 12 for your monthly amount, then divide your monthly amount to get your half month amount. Your accounts for your adjusting entry are Depreciation Expense, Accumulated Depreciation - Building, Accumulated Depreciation -Computer Equipment, and Accumulated Depreciation - Office Equipment. For number 33 the amount is given to you. So your accounts are Salaries Expense and Salaries Payable. For number 34 you need to compute the amount of interest. Your accounts will be Interest Expense and Interest Payable. For number 35 you need to compute the amount. Your accounts are Income Taxes Expense and Income Taxes Payable. |
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Thank You.You helped me a lot. May I contact you by email?
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 Originally Posted by pready
Ok. I finish the problem. Any mistakes here? 01 Jun 01 1110 Cash Owner Investment 62,400.00 01 Jun 01 3100 Capital Stock Owner Investment 62,400.00 02 Jun 01 1110 Cash 24,960.00 02 Jun 01 1311 Computer Equip. Need a Description 35,520.00 02 Jun 01 3100 Capital Stock Need a Description 60,480.00 03 Jun 01 1110 Cash 49,200.00 03 Jun 01 1311 Computer Equip. Need a Description 12,000.00 03 Jun 01 1211 Office Equip. Need a Description 1,200.00 03 Jun 01 3100 Capital Stock Need a Description 62,400.00 04 Jun 02 1311 Computer Equip. 160,000.00 04 Jun 02 1110 Cash Need a Description 32,000.00 04 Jun 02 2202 Notes Payable Need a Description 128,000.00 05 Jun 04 1211 Office Equip. 600.00 05 Jun 04 2101 Accounts Payable Need a Description 600.00 06 Jun 08 2101 Accounts Payable 120.00 06 Jun 08 1211 Office Equip. Need a Description 120.00 07 Jun 10 2202 Notes Payable 24,500.00 07 Jun 10 1110 Cash Need a Description 24,500.00 08 Jun 14 1130 Prepaid Insurance 5,976.00 08 Jun 14 1110 Cash Need a Description 5,976.00 09 Jun 16 1110 Cash 8,250.00 09 Jun 16 4100 Computer & Consulting Revenue Need a Description 8,250.00 10 Jun 16 1510 Land 17,000.00 10 Jun 16 1411 Building Cost Need a Description 90,000.00 10 Jun 16 1110 Cash Need a Description 10,700.00 10 Jun 16 2201 Mortgage Payable Need a Description 96,300.00 11 Jun 17 1140 Prepaid Rent 6,000.00 11 Jun 17 1110 Cash Need a Description 6,000.00 12 Jun 17 5030 Advertising Expense 275.00 12 Jun 17 2101 Accounts Payable Need a Description 275.00 13 Jun 21 2101 Accounts Payable 240.00 13 Jun 21 1110 Cash Need a Description 240.00 14 Jun 21 1211 Office Equip. 775.00 14 Jun 21 1110 Cash Need a Description 775.00 15 Jun 21 1120 Accounts Receivable 4,800.00 15 Jun 21 4100 Computer & Consulting Revenue Need a Description 4,800.00 16 Jun 22 5020 Salary Expense 1,035.00 16 Jun 22 1110 Cash Need a Description 1,035.00 17 Jun 22 5040 Repairs & Maint. Expense 1,165.00 17 Jun 22 2101 Accounts Payable Need a Description 1,165.00 18 Jun 22 2101 Accounts Payable 275.00 18 Jun 22 1110 Cash Need a Description 275.00 19 Jun 23 1150 Office Supplies 530.00 19 Jun 23 2101 Accounts Payable Need a Description 530.00 20 Jun 23 1110 Cash 3,845.00 20 Jun 23 1120 Accounts Receivable Need a Description 3,845.00 21 Jun 28 1120 Accounts Receivable 5,700.00 21 Jun 28 4100 Computer & Consulting Revenue Need a Description 5,700.00 22 Jun 29 2101 Accounts Payable 1,165.00 22 Jun 29 1110 Cash Need a Description 1,165.00 23 Jun 29 1110 Cash 5,400.00 23 Jun 29 1120 Accounts Receivable Need a Description 5,400.00 24 Jun 29 5020 Salary Expense 1,035.00 24 Jun 29 1110 Cash Need a Description 1,035.00 25 Jun 30 5050 Oil & Gas Expense 790.00 25 Jun 30 2101 Accounts Payable Need a Description 790.00 26 Jun 30 3300 Dividends 1,466.80 26 Jun 30 1110 Cash Need a Description 1,466.80 27 Jun 17 5010 Rent Expense 2,000.00 27 Jun 17 1140 Prepaid Rent Need a Description 2,000.00 28 Jun 30 5080 Supplies Expense 316.00 28 Jun 30 1150 Office Supplies Need a Description 316.00 29 Jun 16 5090 Interest Expense 34,106.25 29 Jun 16 2103 Interest Payable Need a Description 34,106.25 30 Jun 14 5100 Insurance Expense 249.00 30 Jun 14 1130 Prepaid Insurance Need a Description 249.00 31 Jun 25 1120 Accounts Receivable 5,000.00 31 Jun 25 4100 Computer & Consulting Revenue Need a Description 5,000.00 32 Jun 30 5110 Depreciation Expense 3,704.00 32 Jun 30 1412 Accum. Depr.-Building Need a Description 220.00 32 Jun 30 1312 Accum. Depr.-Computer Equip. Need a Description 3,459.00 32 Jun 30 1212 Accum. Depr.-Office Equip. Need a Description 25.00 33 Jun 30 5020 Salary Expense 621.00 33 Jun 30 2105 Salaries Payable Need a Description 621.00 34 Jun 30 5090 Interest Expense 1,031.00 34 Jun 30 2103 Interest Payable Need a Description 1,031.00 35 Jun 30 5120 Income Tax Expense 2,530.75 35 Jun 30 2106 Income Taxes Payable Need a Description 2,530.75 36 Jun 30 4100 Computer & Consulting Revenue 23,750.00 36 Jun 30 3400 Income Summary Need a Description 23,750.00 37 Jun 30 3400 Income Summary 48,858.00 37 Jun 30 5010 Rent Expense Need a Description 2,000.00 37 Jun 30 5020 Salary Expense Need a Description 2,691.00 37 Jun 30 5030 Advertising Expense Need a Description 275.00 37 Jun 30 5040 Repairs & Maint. Expense Need a Description 1,165.00 37 Jun 30 5050 Oil & Gas Expense Need a Description 790.00 37 Jun 30 5080 Supplies Expense Need a Description 316.00 37 Jun 30 5090 Interest Expense Need a Description 35,137.25 37 Jun 30 5100 Insurance Expense Need a Description 249.00 37 Jun 30 5110 Depreciation Expense Need a Description 3,704.00 37 Jun 30 5120 Income Tax Expense Need a Description 2,530.75 38 Jun 30 3400 Income Summary 10,123.00 38 Jun 30 3200 Retained Earnings Need a Description 10,123.00 39 Jun 30 3200 Retained Earnings 1,466.80 39 Jun 30 3300 Dividends Need a Description 1,466.80 |
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Originally Posted by pready
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