ces Grid Iron Prep Incorporated (GIPI) is a service business incorporated in January of the current year to provide personal training for athletes aspiring to play college football. The following transactions occurred during the month ended January 31. a. GIPI issued stock in exchange for $200,000 cash on 1/01. b. GIPI purchased a gymnasium building and gym equipment on 1/02 for $62,000, 80% of which related to the gymnasium and 20% to the equipment. c. GIPI paid $200 cash on 1/03 to have the gym equipment refurbished before it could be used. d. GIPI provided $7,000 in training on 1/04 and expected collection in February. e. GIPI collected $45,000 cash in training fees on 1/10, of which $43,000 related to January and $2,000 related to February. GIPI paid $27,000 of wages and $9,500 in utilities on 1/30. g. GIPI will depreciate the gymnasium building using the straight-line method over 10 years with a residual value of $2,500. Gym equipment will be depreciated using the double-declining-balance method, with an estimated residual value of $3,500 at the end of its four-year useful life. Record depreciation on 1/31 equal to one-twelfth the yearly amount. h. GIPI received a bill on 1/31 for $480 for advertising done on 1/31. The bill has not been paid or recorded. 1. GIPI uses the aging method for estimating doubtful accounts and, on 1/31, will record an estimated 3 percent of its under-30-day-old accounts as not collectible. J. GIPI's income tax rate is 30%. Assume depreciation for tax is the same amount as depreciation for financial reporting purposes. No Date 1 January 01 Cash Common Stock 2 January 02 Buildings Equipment Cash 3 January 03 Equipment Cash General Journal Debit 200,000 Credit 200,000 49,600 12,400 62,000 200 200 4 January 04 Accounts Receivable 7,000 Service Revenue 7,000 5 January 10 Cash Service Revenue Deferred Revenue 45,000 43,000 2,000 6 January 30 Salaries and Wages Expense 27,000 Utilities Expense 9,500 Cash 36,500 7 January 31 Depreciation Expense Accumulated Depreciation-Equipment Service Revenue 43,000 Deferred Revenue 2,000 6 January 30 Salaries and Wages Expense 27,000 Utilities Expense 9,500 Cash 36,500 7 January 31 Depreciation Expense Accumulated Depreciation-Equipment Accumulated Depreciation-Buildings 8 January 31 Advertising Expense Accounts Payable 9 January 31 Bad Debt Expense Allowance for Doubtful Accounts 10 January 31 Income Tax Expense Income Tax Payable - 480 480 GRID IRON PREP INCORPORATED Income Statement For the Month Ended January 31 0 0 0 0 0 0 0 0 0 Income before Income Tax Expense 0 GRID IRON PREP INCORPORATED Statement of Retained Earnings For the Month Ended January 31 Balance, January 1 Dividends Balance, January 31 es GRID IRON PREP INCORPORATED Balance Sheet As of January 31 0 0 $ 0 0 0 0 $ 0 0 0