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Posted: June 26th, 2022
Accounting Homework 1. Neal decides to start a smartphone app
Accounting Homework 1. Neal decides to start a smartphone app development company that they incorporate as Softbyte SA. On September 1, 2020, he invested €30,000 cash in the business in exchange for €30,000 of ordinary shares. The ordinary shares indicate the ownership interest that the Neals have in Softbyte SA.
2. Softbyte SA purchases computer equipment for €7,000 and promised to pay after one month.
3. Softbyte SA purchases headsets (and other computer accessories expected to last several months) for €1,600 from Mobile Solutions on cash.
4. Softbyte SA receives €2,000 cash from customers for app development services it has performed.
5. Softbyte SA has salaries of employees for 1,000 which are still due.
6. Softbyte SA performs €5,000 of app development services for customers. The company receives cash of €4,000 from customers, and it bills the balance of €1,000 on account.
7. Softbyte SA pays the following expenses in cash for September: office rent €600, salaries and wages of employees €900, and utilities €200.
8. Softbyte has paid their due amount in salaries of 1,000 in cash from transaction 5
9. : Softbyte SA receives €1,000 in cash from customers who had been billed for services [in Transaction (6)].
10. The company pays a dividend of €2,000 in cash to Ray and Barbara Neal, the shareholders of Softbyte SA. This transaction results in an equal decrease in assets and equity.
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