General Journal
#	Date	Account name		Ref	Debit	Credit
1	January 3	Payroll expense			$ 110,000
		Cash				$ 110,000
2	January 3	Inventory			$ 55,692
		Raw Materials			$ 37,128
		Shipping expense			$ 550
		Accounts Pay - Dallas Bike Basics				$ 92,820
		Cash				$ 550
3	January 3	Accounts Rec - Windy City Bikes			$ 22,000
		Sales				$ 22,000
		Cost of Goods Sold			$ 15,180
		Inventory				$ 15,180
4	January 7	Cash			$ 16,850
		Accounts Rec - Northwest Bikes				$ 16,850
5?	January 10	Accrued Expenses			$ 988
		Cash				$ 988
8	January 11	Raw Materials Inventory			$ 99,418
		Accounts Payable - Space Bikes				$ 99,418
9	January 11	Cash			$ 22,000
		Accounts Rec - Windy City Bikes				$ 21,560
		Cash Discount				$ 440
10	January 12	Accounts Pay - Dallas Bike Basics			$ 92,820
		Cash				$ 92,820
11	January 17	Accounts Pay - Lightbulb Accessory Kits			$ 17,010
		Cash				$ 17,010
12	January 17	Accounts Rec - Rocky Mountain Bikes			$ 128,130
		Sales				$ 128,130
		Cost of Goods Sold			$ 79,441
		Inventory				$ 79,441
13	January 17	Accounts Payable - Space Bikes			$ 99,418
		Shipping Expense			$ 802
		Cash				$ 100,220
					$ 797,427	$ 797,427
14	January 17	Bad Debts Expense			$ 1,610
		Accounts Receivable				$ 1,610
15	January 18	Cash			$ 89,960
		Accounts Receivable				$ 89,960
16	January 19	Accounts Payable			$ 350
		Cash				$ 350
17		Accounts Receivable			$ 2,507
		Sales				$ 2,300
		Sales tax payable				$ 207
		cost of goods sold			$ 1,380
		Merchandise inventory				$ 1,380
19	January 24	Accounts receivable			$ 27,450
		Sales				$ 27,450
		Cost of goods sold			$ 17,092
		Inventory				$ 17,092
18	January 25	Prepaid advertising expense			$ 15,000
		Bank				$ 15,000
20	January 26	Bank			$ 27,450
		Accounts receibable				$ 27,450
22		Accounts payable			$ 30,890
		cash				$ 30,890
23		accounts receivable			$ 340,805
		sales revenue				$ 340,805
		Cost of good sold			$ 234,680
		Merchandise inventory				$ 234,680
24	January 31	Sales tax payable			$ 3,063
		Cash				$ 3,063
25		Rent expense			$ 4,500
		Cash				$ 4,500
26		Accounts Payable			$ 4,195
		Bank				$ 4,195
					$ 799,322	$ 799,322

1. Based on prior experience, GBI estimates that approximately % of the net credit sales (gross credit sales minus returns of credit sales) for the month will become bad debt. GBI writes off bad debts as they occur and recognizes bad debt expenses based on anticipated bad debts as an adjusting entry each month.

2. As a control measure, physical inventories are taken periodically alternating between the raw materials inventory, finished goods inventory and trading goods inventory. A physical inventory of the trading goods inventory was taken at the end of January. It was determined that the value of the trading goods merchandise on hand was $40,710.

3. GBI counted the office 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 $620.

4. Production Machinery, Equipment, and Fixtures were placed in service on January 1, 2018, are expected to last 15 years 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 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 monthly (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 utility company for January usage is $1,046.

6. Liability insurance for the six months ending on February 28 for $15,000 was paid last August 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's salaries. (For purposes of this assignment, ignore manufacturing and assume all labor costs will be expensed.)