Account Balances as of December 31 st 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) 528,000 220210 Production Machinery, Equip Fixtures (Dir Post) 915,000 220310 Accumulated Depreciation Machinery (Direct Post) 408,000 300200 Accounts Payable (Direct Posting Account) 48,000 300700 Payables Salaries and Wages 94,313 300800 Accrued Expenses 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 Adjustment information as of January 31, 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, 2013, with 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 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 ) Using these account balances and additional adjustment information above, record adjusting journal entries Adjustment information as of January 31, 20YY not already given in the original transaction(s)

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Account Balances as of December 31 st Debit Balance Credit Balance 100000 Bank Account $277,518 110100 Accounts Receivable (Direct Posting Account) 92,670 110150 Allowance for

Account Balances as of December 31^st


		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)	528,000
220210	Production Machinery, Equip & Fixtures (Dir.Post)	915,000
220310	Accumulated Depreciation-Machinery (Direct Post)		408,000
300200	Accounts Payable (Direct Posting Account)		48,000
300700	Payables-Salaries and Wages		94,313
300800	Accrued Expenses		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


	*Adjustment information as of January 31, 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, 2013, with 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 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.) Using these account balances and additional adjustment information above, record adjusting journal entries. Adjustment information as of January 31, 20YY not already given in the original transaction(s)