For each event listed on the subsequent pages, Prepare a journal entry

A couple of reminders and hints about transactions:

1. In general, this company does not recognize revenue until a product is shipped
2. In general, this company does not record ownership until an item is received
3. Trading Goods , are items that are purchased for resale to customers such as bicycle accessories or safety products.
4. Sales tax is only recorded on a sale if noted below.

DESCRIPTION OF EVENTS OCCURRING during the month of January, 20YY

#	Date	Description of Event
1	January 3	Employees are paid monthly on the first business day of the month for work done in the previous month. The total payroll for the previous month is $150,000. (Ignore payroll taxes for this assignment.) Accounting wrote and distributed the paychecks.
2	January 3	GBI received $55,692 in safety product inventory ( trading goods) and $37,128 in raw materials from Dallas Bike Basics. This inventory was ordered on December 28.
3	January 3	Windy City Bikes in Chicago, IL ordered $22,000 of bicycle accessories from GBI. The cost of the accessories (to GBI) is $15,180. The goods were shipped to Windy City immediately via UPS using Windy City's UPS shipping number.
4	January 7	GBI received payment of $16,850 from Northwest Bikes in Seattle, WA for the balance due on their account.
5	January 10	GBI's account on the utility company website is updated at the end of each month when the meter is read. GBI uses this data to accrue the expenses at the end of each month (in this case on December 31st.) This allows recognition of the expense in the correct period. Expenses are usually accrued at the end of the month as "Accrued Expenses". GBI paid the December, 20YY-1 accrued utility bill of $1,201..
6	January 10	GBI's advertisement in the English language edition of Italian Cycling Journal was published today. This ad was prepaid at the end of July 20YY-1 for six months of advertising, August 20YY-1 through January 20YY, (Five months of advertising have already been used through December 20YY-1.)
7	January 10	GBI received payment from Windy City Bikes for their order from January 3.
8	January 12	GBI paid $92,820 for the inventory order that they received from Dallas Bike Basics January 3.
9	January 17	GBI paid an invoice from Lightbulb Accessory Kits for ordered goods that were received on December 20. The amount of the invoice from Lightbulb is $17,010 due net 30.
10	January 17	Rocky Mountain Bikes in Denver, CO placed an order with GBI for $128,130 worth of bicycles to be delivered immediately. Rocky Mountain will pay the shipping. The bikes cost GBI $79,441. GBI shipped the order immediately so that Rocky Mountain can start promoting the bikes.
11	January 20	GBI received notice that Bunky's Bicycle Emporium had declared section 13 bankruptcy which meant GBI would not be able to collect the $1,610 that Bunky's owed them.
12	January 20	GBI sent a $30,890 check to Night Rider Aluminum Products for an order of bicycle parts GBI received December 30th.
13	January 31	GBI pays sales tax once a quarter via the state's electronic filing and payment system. GBI filed its return and paid $2,798 in sales tax for the quarter ending December 31, 20YY-1..

Using these account balances and additional adjustment information below, record adjusting journal entries. Adjustment information as of January 31, 20YY not already given in the original transaction(s):):

1. GBI counted the office supplies (Inventory, Operating Supplies) on hand after the close of business on the last day of the month and determined the cost of the unused office supplies to be $480.
2. Production Machinery, Equipment and Fixtures were placed in service on January 1, 20YY-5, are expected to last 10 years with no salvage value. GBI depreciates fixed assets on a straight-line basis and those assets acquired in the first half of the month are depreciated for the entire month, while fixed assets placed in service during the last half of the month are not depreciated until the second month. Depreciation is rounded to the nearest dollar and assets are depreciated on a monthly basis (i.e. number of days in the month is not of consequence).
3. GBI used the Internet to review the monthly charges for utilities the business consumed during January. Based on the internet report, the amount to be billed by the utilities company for January usage is $1,096.
4. Liability insurance for the six month period ending on February 28, 20YY in the amount of $15,000 was paid August 1, 20YY-1. Liability insurance is assumed to be utilized uniformly over the six month policy period.
5. GBI needs to recognize the wages expense for the month. Since all employees are paid salaries and no changes have been made, this amount is the same as the previous month salaries. (For purposes of this assignment, ignore manufacturing and assume all labor costs will be expensed. Ignore payroll taxes)

Answer rating: 100% (QA)

Jan 10 Cash 22000 Accounts Receivable 22000 To record received ... View the full answer