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 $100,000 cash on 1/01. b. GIPI purchased a gymnasium building and gym equipment on 1/02 for $50,000, 80% of which related to the gymnasium and 20% to the equipment. c. GIPI paid $260 cash on 1/03 to have the gym equipment refurbished before it could be used. d. GIPI provided $4,000 in training on 1/04 and expected collection in February. e. GIPI collected $36,000 cash in training fees on 1/10, of which $34,000 related to January and $2,000 related to February. f. GIPI paid $23,000 of wages and $7,000 in utilities on 1/30. g. GIPI will depreciate the gymnasium building using the straight-line method over 20 years with a residual value of $2,000. Gym equipment will be depreciated using the double-declining-balance method, with an estimated residual value of $2,250 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 $350 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. Journal entry worksheet < 1 2 3 5 6 GIPI's income tax rate is 30%. Assume depreciation for tax is the same amount as depreciation for financial reporting purposes. Record the transaction. Note: Enter debits before credits. Date General Journal Debit Credit January 31 Income Tax Expense Income Tax Payable 10 10 > Record entry Clear entry View general journal Revenues:" GRID IRON PREP INCORPORATED Income Statement For the Month Ended January 31 Service Revenue 4 69 $ 38,000 0 Operating Expenses: Salaries and Wages Expense Utilities Expense Depreciation Expense Advertising Expense Bad Debt Expense 16,000 7,000 575 350 120 0 Total Operating Expenses $ 24,045 Income before Income Tax Expense Income Tax Expense 0 Net Income GRID IRON PREP INCORPORATED Statement of Retained Earnings For the Month Ended January 31 Balance, January 1 Net Income Dividends Balance, January 31 Current Assets Cash GRID IRON PREP INCORPORATED Balance Sheet As of January 31 Assets Accounts Receivable 62,740 62,740 $ 62,740 0 0 0 $ 0 Statement of Retained Earnings 0 0