32. The fixed assets have estimated useful lives as follows:
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 office equipment has a scrap value of $500. The computer equipment has no scrap value. Calculate the depreciation for one month.
Byte of Accounting, Inc.
Description of transaction
June 1: Byte of Accounting, Inc. acquired $70,000 in cash from Lauryn and issued 2,800 shares of its common stock.
June 1: Byte of Accounting, Inc. issued 2,570 shares of its common stock after $26,250 in cash and computer equipment with a fair market value of $38,000 were received.
June 1: Byte of Accounting, Inc. issued 1,877 shares of its common stock after acquiring from Courtney $31,250 in cash, computer equipment with a fair market value of $14,500 and office equipment with a fair value of $1,175.
June 2: A down payment of $34,000 in cash was made on additional computer equipment that was purchased for $170,000. A five-year note was executed by Byte for the balance.
June 4: Additional office equipment costing $500 was purchased on credit from Discount Computer Corporation.
June 8: Unsatisfactory office equipment costing $100 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte.
June 10: Byte paid $26,000 on the balance it owed on the June 2 purchase of computer equipment.
June 14: A one-year insurance policy covering its computer equipment was purchased by Byte for $6,480 in cash. The effective date of the policy was June 16.
June 16: A check in the amount of $8,250 was received for consulting revenue.
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.
June 17: Cash of $5,000 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.
June 21: Accounts payable in the amount of $400 were paid.
June 21: A fax machine for the office was purchased for $700 cash.
June 21: Billed various miscellaneous local customers $4,100 for consulting services performed.
June 22: Paid salaries of $960 to equipment operators for the week ending June 18.
June 22: Received a bill for $1,290 from Computer Parts and Repair Co. for repairs to the computer equipment.
June 22: Paid the advertising bill that was received on June 17.
June 23: Purchased office supplies for $705 on credit. Record the purchase as an increase to the assets.
June 23: Cash in the amount of $3,285 was received on billings.
June 28: Billed $5,910 to miscellaneous customers for services performed to June 25.
June 29: Paid the bill received on June 22, from Computer Parts and Repairs Co.
June 29: Cash in the amount of $5,600 was received for billings.
June 29: Paid salaries of $960 to equipment operators for the week ending June 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 $0.21 per share to the three shareholders of Byte. [IMPORTANT NOTE: The number of shares of capital stock outstanding can be determined from the first three transactions.]
Recently Asked Questions
- Good Afternoon. I'm a Strayer University student, can you please provide instructions on how to pass the ACC599 Peregrine Exam - Strayer University. Thanks
- Assume that you are about to start your own business and are short on resources. You want to build a company with happy and motivated employees. What areas can
- Carefully , review the code and perform analysis as needed. Consider the following rules and recommendations and hints for items that you might want to review.