Account Balances as of December 31, 2018

Debit Balance Credit Balance

100000 Bank Account $277,518

110100 Accounts Receivable (Direct Posting Account) 92,670

110150 Allowance for Bad Debts 2,500

200600 Inventory-Operating Supplies 8,832

200900 Inventory-Raw Materials (Direct Post) 52,000

200910 Inventory-Finished Goods (Direct Post) 281,298

200920 Inventory-Trading Goods (Direct Post) 66,474

210000 Prepaid Insurance 5,000

212000 Prepaid Advertising 1,100

220110 Land (Direct Post) 425,000

220210 Production Machinery, Equip & Fixtures (Dir.Post) 915,000

220310 Accumulated Depreciation-Machinery (Direct Post) 305,000

300200 Accounts Payable (Direct Posting Account) 48,000

300700 Payables-Salaries and Wages 94,313

300800 Accrued Expenses Payable 1,200

320000 Accrued Tax Output 3,000

329000 Common Stock 1,000,000

329100 Additional Paid-in-Capital 52,870

330010 Retained Earnings (Direct Posting) 618,009

Events During January 2019

Event 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. (Ignore payroll taxes for this assignment.) Accounting wrote and distributed the paychecks.

2 GBI received $60,000 in safety product inventory and $40,000 in raw materials from Dallas Bike Basics. This inventory was ordered on December 28. The payment terms for the invoice total of $100,000 are net 10 days. GBI paid the CWX shipping company $500 with a manual check for the shipment of the goods. The bill of lading showed that the safety product inventory arrived in 6 boxes with a total weight of 50 lbs. and the raw materials came on a pallet and weighed 60 lbs. Shipping charges are allocated based on weight.

3 Windy City Bikes in Chicago, IL ordered $22,000 of bicycle accessories from GBI. The cost of the accessories (to GBI) is $15,000. The goods were shipped to Windy City immediately via UPS using Windy Citys UPS shipping number. The terms of payment for Windy Citys order are 3/10 net 30 days.

4 January 7 GBI received payment of $14,000 from Northwest Bikes in Seattle, WA for the balance due on their account.

5 January 10 GBIs 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 utility bill via the companys automatic electronic bill pay program.

6 GBIs advertisement in the English language edition of Italian Cycling Journal was published today. This ad was prepaid at the end of July for six months of advertising, August through January, (Five months of advertising have already been used.)

7 January 11 The office manager in San Diego ordered $432 of office (operating) supplies from Staples. While on the way back from a delivery, one of the warehouse staff picked up the Staples order and brought it to GBIs office. GBI has an account with Staples and payment terms are net 10. Operating supplies expense is figured at the end of the month determined by the amount of supplies used during the month.

8 GBI ordered $75000 in raw materials from Space Bike Composites in Houston, TX. Terms of payment to Space Bikes are net 30.

9 GBI received payment from Windy City Bikes for their order from January 3. Windy City paid the invoice amount less the discount for paying within 10 days.

10 January 12 GBI paid $100,000 via bank transfer for the inventory order that they received from Dallas Bike Basics January 3.

11 January 13 In order to better track inventory, GBI ordered a bar-coding and tracking system which will be installed and tested by Computer Specialists, Inc. (CSI). The system will allow employees to track inventory using mobile devices and special software which will link into their new computerized accounting system. The barcode system costs $6,000 (including sales tax) and CSI will charge GBI $1,300 for the installation and tests. GBI paid a deposit of $2,000 on the system and the remainder is due and payable when the system is installed. GBI will classify the bar-coding system as Production Machinery, Equipment and Fixtures.

12 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 $15,890 due net 30.

13 The city of Denver will be hosting a decathlon at the end of February. The event is expected to create demand for high quality bikes. Rocky Mountain Bikes in Denver, CO placed an order with GBI for $128,000 worth of bicycles to be delivered immediately. Rocky Mountain will pay the shipping. The bikes cost GBI $78000. GBI shipped the order immediately so that Rocky Mountain can start promoting the bikes. Because Rocky Mountain is a good customer, GBI is giving them special terms of net 45 days on this order.

14 GBI received raw materials inventory ordered from Space Bike Composites January 11. Shipping charges of $600 were included in the invoice from Space Bike.

15 GBI received notice that Bunkys Bicycle Emporium had declared section 13 bankruptcy which meant GBI would not be able to collect the $3,350 that Bunkys owed them.

16 January 18 GBI received a $90,000 funds transfer from Silicon Valley Bikes in Palo Alto for the balance due on their account.

17 January 19 GBI paid Staples for the office supplies they received January 11.

18 SoCal Bikes in Irvine, CA placed an order for $2500 in bicycle helmets for a special event in February. The merchandise cost GBI $1,300. SoCal sent a truck to the GBI distribution center in SanDiego, CA and picked up the merchandise directly from GBIs warehouse. Terms of payment are net 30. (Dont forget to charge sales tax of 6.00% for this order.)

19 January 24 Beantown Bikes in Boston, MA placed an order with GBI for $27,000 in bicycles. The cost of the bicycles is $17,000. Beantown Bikes is a new customer. Its buyers saw GBIs booth at a trade show. Because Beantown is a new customer, they must either wait until their credit can be approved or pay for the order before GBI will ship the bikes to them.

20 January 25 GBI has been offered the opportunity to advertise in the Bicycle Times online magazine for a reduced price if they pay for three months in advance. In light of the upcoming Tour de France, the advertising is a great opportunity for GBI to get additional recognition. The advertising will start in February. GBI wrote a check for $9,000 for three months of advertising.

21 January 26 GBI received notification from their bank that Beantown Binkes had transferred funds into their account for their prior order, so GBIs warehouse personnel shipped Beantowns order. Beantown will be responsible for paying Fed-X $400 for shipping the order.

22 January 27 The county approved GBIs building plans for their new warehouse. Estimated building costs are $1,100,000 which will be funded via a mortgage from Bank of America. GBI plans to break ground on the new building April 18th of this year.

23 GBI sent a $31,000 check to Night Rider Aluminum Products for an order of bicycle parts GBI received December 30th.

24 Big Apple Bikes in New York City is expanding to another location in New York and needs to stock the new location. GBI received a phone order from Big Apple for $230,000 in bicycles and $108,500 in bicycle accessories and safety gear at special discount prices. The cost of the bicycles in this order is $170000 and the cost of the accessories is $65,000. Big Apple will have a contract trucking company pick up the order when it is ready. The order is sent to GBIs warehouse for picking and packing, which may take a couple days. Payment terms to Big Apple for this order are net 30.

25 January 31 GBI pays sales tax once a quarter via the states electronic filing and payment system. GBI filed its return and paid its sales tax for the quarter ending December 31.

26 GBI paid Februarys rent of $4,000 for the office and warehouse space in San Diego.

27 CSI installed and tested the new barcode system. The warehouse manager approved the installation and commented that she thinks it works great. GBI wrote a check to CSI for the balance owed and gave it to the installer.

28 Big Apples truck arrived at GBIs warehouse and picked up the order from January 27th.

Adjustment information as of January 31, 2019 not already given in the original transaction(s):

1. Based on prior experience, GBI estimates that approximately 2 % of the accounts receivable balance will become bad debt. GBI writes off bad debts as they occur and recognizes bad debt expense based on analyzing accounts receivable as an adjusting entry each month.

2. As a control measure, physical inventories are taken on a periodic basis alternating between the raw materials inventory, finished goods inventory and trading goods inventory. Physical inventory of the finished goods inventory was taken at the end of January. It was determined that the value of the finished goods merchandise on hand was $17,000.

3. GBI counted the office (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 $1000.

4. Production Machinery, Equipment and Fixtures were placed in service on January 1, 2014, with an expected service life of 15 years and no salvage value. The bar-code system has a 5-year life and no salvage value. GBI depreciates fixed assets on a straight-line basis and those assets acquired in the first half of the months 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).

5. 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 the same as was billed for December.

6. Liability insurance for the six-month period ending on February 28, 2019 was paid last September on the first of the month. Liability insurance is assumed to be utilized uniformly over the six-month policy period.

7. 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.)

I need help with this the totals of journal entries and adjusting entries are given below

Below are the check numbers for EXCEL WORK. You can also find them under Grading Rubric.

Total Balance of GL (General Journal Entries): 1,439,573

Total Balance of AE (Adjusting Entries): 122,002

Total Expenses: 468,658

Total Current Assets: 864,473