Instructions and information for the case study

You have been hired by Bitbase, a cryptocurrency exchange based in Chicago, as their accountant.
Bitbase started operations in January of 2021 and needs you to perform bookkeeping from January of 2021 through
Here are some pertinent facts about the company:

1. Bitbase is a corporation formed in Delaware with operations in the state of Illinois

2. Bitbase raised $1,500,000 from investors using a SAFE note agreement (Hint: this should be treated as an equity
3. Bitbase earns revenue by taking a transaction fee for trades executed on the Bitbase platform.
4. Bitbase also earns revenue by providing custody services to companies looking to hold digital assets. It typically
5. Bitbase has 10 employees, all based in Illinois
6. Bitbase rents an office space in the River North neighborhood
7. Bitbase reports its financial statements on an accrual basis

Instructions for the case

In the first set of tabs you will find the data set you need to complete the accounting. The data set includes a set of
data on bills received, and other useful information needed. In the second set of tabs, you will find a sheet to input y
and T-accounts, and a sheet for financials.
Do not answer the questions in exam relating to this case until you have complete all of the activites in this spreads

HINTS:
1. Start with the Custody Agreement Data, Bills, and Other Depreciation Schedule tabs first and record transactions
2. Re-Read points 1-7 before recording any transactions
3. When recording transactions in the Journal Entries and T-Accounts tab, I would recommend recording the entry a
4. Your debits must equal your credits
5. Debits on the left and credits on the right
m January of 2021 through June of 2021 and prepare financial statements.

uld be treated as an equity investment)

digital assets. It typically charges a flat fee (paid up front) for 12 months worth of custody services.

data set includes a set of transactions from the bank account,

will find a sheet to input your journal entries

he activites in this spreadsheet.

st and record transactions based on the data in those tabs before moving on to the Bank Statement tab

mend recording the entry and then immediately entering in the T-Accounts
This sheet is blank on purpose
Hint: A positive amount means that money came into the bank account and a negative amount means money went

Date Description Amount Notes

1/1/2021 Wildcat Capital $500,000.00 SAFE Note investment
1/1/2021 Scoots Inc. $120,000.00 Payment received for annual custody agreement
1/3/2021 Farley Investments LLC $750,000.00 SAFE Note investment
1/5/2021 Dolphin Tank Inc. $250,000.00 SAFE Note investment
1/7/2021 Amazon Web Services -$1,250.00 Payment for hosting services with Amazon
1/15/2021 Notion Inc. -$75.00 Software costs for Notion
1/31/2021 Gusto payroll -$120,000.00 Salary and wage payment
1/31/2021 Gusto payroll -$9,600.00 Payroll taxes payment
2/1/2021 WeWork Inc. -$5,000.00 Monthly office rent
2/1/2021 Apple Inc. -$24,000.00 Purchases of computers and monitors for employees
2/1/2021 Droned Logistics $60,000.00 Payment received for annual custody agreement
2/7/2021 Amazon Web Services -$1,750.00 Payment for hosting services with Amazon
2/15/2021 Startup Lawyers LLC -$25,000.00 Payment of legal bill
2/15/2021 Notion Inc. -$75.00 Software costs for Notion
2/28/2021 Gusto payroll -$120,000.00 Salary and wage payment
2/28/2021 Gusto payroll -$9,600.00 Payroll taxes payment
3/1/2021 Purple Recruiters Inc. -$15,000.00 Payment of recruiter bill
3/1/2021 WeWork Inc. -$5,000.00 Monthly office rent
3/1/2021 Rollerton $90,000.00 Payment received for annual custody agreement
3/7/2021 Amazon Web Services -$2,000.00 Payment for hosting services with Amazon
3/15/2021 Notion Inc. -$75.00 Software costs for Notion
3/31/2021 Transactions Clearing Haus I $30,000.00 March transaction fee revenue
3/31/2021 Gusto payroll -$120,000.00 Salary and wage payment
3/31/2021 Gusto payroll -$9,600.00 Payroll taxes payment
unt means money went out of the bank account

ody agreement

tors for employees

ody agreement

ody agreement
1 Bitbase incurred $25,000 in legal fees related to raising the SAFE note round. The costs were incurred in Janu
2 Bitbase incurred $15,000 in recruiting fees related to hiring their first employees. The costs were incurred in Fe
3 Bitbase purchased $10,000 worth of furniture and fixtures for their office space. They placed the order on 3/01
nd. The costs were incurred in January. The bill was received on 1/15/2021 and paid on 2/15/2021
yees. The costs were incurred in February. The bill was received on 2/20/2021 and paid on 3/1/2021.
ace. They placed the order on 3/01/2021 and received a bill the same day. They paid the bill in full on 4/1/2021.
n 4/1/2021.
The following are the agreements Bitbase has with its customers for providing custody services
Reminder: Payments are made by customers in full upon signing the agreement with Bitbase but cover a 12 month

Customer Name Agreement AmouStart Date End Date Payment Date

Scoots Inc. $120,000.00 1/1/2021 12/31/2021 1/1/2021
Droned Logistics $60,000.00 2/1/2021 1/31/2022 2/1/2021
Rollerton $90,000.00 3/1/2021 2/28/2022 3/1/2021

Cash Deposits

Customer Name Agreement Amou 01/31/2021 02/28/2021 03/31/2021 04/30/2021

Scoots Inc. $120,000.00 $120,000.00
Droned Logistics $60,000.00 $60,000.00
Rollerton $90,000.00 $90,000.00

Total Cash Deposited $120,000.00 $60,000.00 $90,000.00 $0.00

Revenue Recognition Schedule

Customer Name Agreement Amou 01/31/2021 02/28/2021 03/31/2021 04/30/2021

Scoots Inc. $120,000.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00
Droned Logistics $60,000.00 $5,000.00 $5,000.00 $5,000.00
Rollerton $90,000.00 $7,500.00 $7,500.00

Total Revenue $10,000.00 $15,000.00 $22,500.00 $22,500.00

Deferred (Unearned) Revenue Schedule (Balance)

Customer Name Agreement Amou 01/31/2021 02/28/2021 03/31/2021 04/30/2021

Scoots Inc. $120,000.00 $110,000.00 $100,000.00 $90,000.00 $80,000.00
Droned Logistics $60,000.00 $55,000.00 $50,000.00 $45,000.00
Rollerton $90,000.00 $82,500.00 $75,000.00

Ending Balance $110,000.00 $155,000.00 $222,500.00 $200,000.00

tbase but cover a 12 month period

05/31/2021 06/30/2021 07/31/2021 08/31/2021 09/30/2021 10/31/2021 11/30/2021

$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

05/31/2021 06/30/2021 07/31/2021 08/31/2021 09/30/2021 10/31/2021 11/30/2021

$10,000.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00
$5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00
$7,500.00 $7,500.00 $7,500.00 $7,500.00 $7,500.00 $7,500.00 $7,500.00

$22,500.00 $22,500.00 $22,500.00 $22,500.00 $22,500.00 $22,500.00 $22,500.00

05/31/2021 06/30/2021 07/31/2021 08/31/2021 09/30/2021 10/31/2021 11/30/2021

$70,000.00 $60,000.00 $50,000.00 $40,000.00 $30,000.00 $20,000.00 $10,000.00
$40,000.00 $35,000.00 $30,000.00 $25,000.00 $20,000.00 $15,000.00 $10,000.00
$67,500.00 $60,000.00 $52,500.00 $45,000.00 $37,500.00 $30,000.00 $22,500.00

$177,500.00 $155,000.00 $132,500.00 $110,000.00 $87,500.00 $65,000.00 $42,500.00

12/31/2021

$0.00

12/31/2021
$10,000.00
$5,000.00
$7,500.00

$22,500.00

12/31/2021
$0.00
$5,000.00
$15,000.00

$20,000.00
D
Assume a useful life of 5 years for both the furniture purchased and the computers & hardware purchased

Purchase Description Purchase AmountPurchase DatUseful Life (in years)

Computers & Other Hardware $24,000.00 2/1/2021 5
Furniture & Fixtures $10,000.00 3/1/2021 5

Depreciation Expense Schedule

Customer Name Purchase Amount 01/31/2021 02/28/2021 03/31/2021

Computers & Other Hardware $24,000.00 $0.00 $400.00 $400.00
Furniture & Fixtures $10,000.00 $0.00 $0.00 $166.67

Accumulated Depreciation Schedule (Balance)

Customer Name Purchase Amount 01/31/2021 02/28/2021 03/31/2021

Computers & Other Hardware $24,000.00 $0.00 $400.00 $800.00
Furniture & Fixtures $10,000.00 $0.00 $0.00 $166.67
rs & hardware purchased

04/30/2021 05/31/2021 06/30/2021 07/31/2021 08/31/2021 09/30/2021 10/31/2021

$400.00 $400.00 $400.00 $400.00 $400.00 $400.00 $400.00
$166.67 $166.67 $166.67 $166.67 $166.67 $166.67 $166.67

04/30/2021 05/31/2021 06/30/2021 07/31/2021 08/31/2021 09/30/2021 10/31/2021

$1,200.00 $1,600.00 $2,000.00 $2,400.00 $2,800.00 $3,200.00 $3,600.00
$333.33 $500.00 $666.67 $833.33 $1,000.00 $1,166.67 $1,333.33
11/30/2021 12/31/2021
$400.00 $400.00
$166.67 $166.67

11/30/2021 12/31/2021
$4,000.00 $4,400.00
$1,500.00 $1,666.67
Bitbase has provided the following Chart of Accounts for you to use

Account Name Account Type

Checking Account Asset
Accounts Receivable Asset
Prepaid Software Asset
Computers & Other Hardware Asset
Furniture and Fixtures Asset
Accumulated Depreciation - Computers & Other Hardware Asset
Accumulated Depreciation - Furniture & Fixtures Asset
Accounts Payable Liabilities
Unearned Revenue Liabilities
SAFE Notes Equity
Retained Earnings Equity
Custody Services Revenue Revenue
Transaction Fee Revenue Revenue
Salaries & Wages Expense Expenses
Payroll Tax Expense Expenses
Rent Expense Expenses
Recruiting Expense Expenses
Legal Expense Expenses
Software Subscription Expense Expenses
Hosting Expense Expenses
Depreciation Expense Expenses
This sheet is blank on purpose
Journal Entries for January through March T Accounts

Date Account Debit Credit Checking Account

1/31/2021 Checking Account $120,000.00 120,000
1/31/2021 Custody Services Revenue $120,000.00 60,000
02/28/2021 Checking Account $60,000.00 90,000
02/28/2021 Custody Services Revenue $60,000.00 $500,000.00
03/31/2021 Checking Account $90,000.00 $750,000.00
03/31/2021 Custody Services Revenue $90,000.00 $250,000.00
1/15/2021 Legal Expense 25,000
1/15/2021 Accounts Payable 25,000
2/15/2021 Accounts Payable 25,000
2/15/2021 Checking Account 25,000
2/20/2021 Recruiting Expense 15,000
2/20/2021 Accounts Payable 15,000
3/1/2021 Accounts Payable 15,000
3/1/2021 Checking Account 15,000
3/1/2021 Furniture and Fixtures 10,000
3/1/2021 Accounts Payable 10,000
4/1/2021 Accounts Payable 10,000
4/1/2021 Checking Account 10,000
2/28/2021 Depreciation Expense $400.00
2/28/2021 Accumulated Depreciation - Computers & Other Hardware
03/31/2021 Depreciation Expense $400.00
03/31/2021 Accumulated Depreciation - Computers & Other Hardware
04/30/2021 Depreciation Expense $400.00
04/30/2021 Accumulated Depreciation - Computers & Other Hardware
05/31/2021 Depreciation Expense $400.00
05/31/2021 Accumulated Depreciation - Computers & Other Hardware
06/30/2021 Depreciation Expense $400.00
06/30/2021 Accumulated Depreciation - Computers & Other Hardware
03/31/2021 Depreciation Expense $166.67
03/31/2021 Accumulated Depreciation - Furniture & Fixtures $166.67
04/30/2021 Depreciation Expense $166.67
04/30/2021 Accumulated Depreciation - Furniture & Fixtures $166.67
05/31/2021 Depreciation Expense $166.67
05/31/2021 Accumulated Depreciation - Furniture & Fixtures $166.67
06/30/2021 Depreciation Expense $166.67
06/30/2021 Accumulated Depreciation - Furniture & Fixtures $166.67
1/1/2021 Checking Account $500,000.00
1/1/2021 SAFE Notes $500,000.00
 1/3/2021 Checking Account $750,000.00
1/3/2021 SAFE Notes $750,000.00
1/5/2021 Checking Account $250,000.00
1/5/2021 SAFE Notes $250,000.00
1/7/2021 Hosting Expense 1250
1/7/2021 Checking Account 1250
1/15/2021 Software Subscription Expense $75.00
1/15/2021 Checking Account $75.00
Checking Account Accounts Receivable Prepaid Software
25,000
15,000
10,000
$1,250.00
$75.00

Accum. Depr. Furn and Fix Computers & Other Hardware

$90,000.00

Payroll Tax Expense Rent Expense

Depreciation Expense Accumulated Depreciation - Computers

$400.00
$400.00
$400.00
$400.00
$400.00
$166.67
$166.67
 $166.67
$166.67

Hosting Expense Software Subscription Expense

$1,250.00 $1,250.00
 Security Deposit Furniture and Fixtures
10,000

Accum Depr. Comp. Equip. Accounts Payable

$400.00 25,000 25,000
$400.00 15,000 15,000
$400.00 10,000 10,000
$400.00
$400.00

Recruiting Expense Legal Expense

15,000 25,000

Accumulate Depreciation - Furniture SAFE Notes

$166.67 $500,000.00
$166.67 $750,000.00
$166.67 $250,000.00
$166.67
Financial Statements

Balance Sheet
Bitbase Inc.
as of 3/31/2021

Assets
Checking Account
Accounts Receivable
Prepaid Software
Computers & Other Hardware
Furniture and Fixtures
Accumulated Depreciation - Computers & Other Hardware
Accumulated Depreciation - Furniture & Fixtures

Total Assets 0.00

Liabilities
Accounts Payable
Unearned Revenue

Total Liabilities 0.00

Equity
SAFE Notes
Retained Earnings 0.00

Total Equity 0.00

Total Liabilities + Equity 0.00

check number (should equal zero) 0.00

 Income Statement
Bitbase Inc.
Jan 2021 - Mar 2021

Revenue
Custody Services Revenue
Transaction Fee Revenue
Total Revenue 0.00

Cost of Sales
Hosting Expense

Gross Profit 0.00

Expenses
Salaries & Wages Expense
Payroll Tax Expense
Rent Expense
Recruiting Expense
Legal Expense
Software Subscription Expense
Hosting Expense
Depreciation Expense

Total Expenses 0.00

Net Income 0.00