June 1: Byte of Accounting, Inc. received $27,040 in cash and computer equipment with a
fair market value of $40,560 when Jeremy purchased 2,600 shares of its common stock .
June 1: Byte of Accounting, Inc. received $40,300 in cash, computer equipment with a
fair market value of $11,440 and office equipment with a fair value of $988 when
Courtney purchased 2,028 shares of its common stock.
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 $600 was purchased on credit from Discount Computer Corporation.
June 8: Unsatisfactory office equipment costing $120 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte.
June 16: Byte purchased a building and the land it is on for $119,000, to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $19,000. The balance of the cost is to be allocated to the building. Byte made a cash down payment of $11,900 and executed a mortgage for the balance. The mortgage is payable in eight equal annual installments beginning July 1.
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 $8,000. The office equipment has a scrap value of $400. The computer equipment has no scrap value. Calculate the depreciation for one month.