Question
NOTE: 20YY = 2015 the current year 20YY -1 = 2014 the prior year. Monthly Transactions and Closing Transactions For each event listed below, prepare
NOTE:
20YY = 2015 the current year
20YY -1 = 2014 the prior year.
Monthly Transactions and Closing Transactions
For each event listed below, prepare a journal entry to reflect the event
DESCRIPTION OF EVENTS OCCURRING during the month of January, 20YY
# | Date | Description of Event | |
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1 | January 3 | Employees are paid monthly on the first business day of the month for work done in the previous month. The total payroll for the previous month is $100,000. (Ignore payroll taxes for this assignment.) Accounting wrote and distributed the paychecks. |
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2 | January 3 | GBI received payment of $20,750 from Northwest Bikes in Seattle, WA for the balance due on their account. |
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3 | January 3 | Windy City Bikes in Chicago, IL ordered $23,525 of bicycle accessories (trading goods inventory) from GBI. The cost of the accessories (to GBI) is $13,280. The goods were shipped to Windy City immediately via UPS using Windy Citys UPS shipping number. |
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4 | January 7 | GBI received $16,544 in safety product inventory ( trading goods) and $18,119 in raw materials from Dallas Bike Basics. This inventory was ordered on December 28. |
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5 | January 10 | GBI paid the December 2014 accrued utility bill of $988. NOTE: 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. |
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6 | January 10 | GBIs advertisement in the English language edition of Italian Cycling Journal was published today. This ad was prepaid at the end of October 2014 for six months of advertising, November 2014 through April 2015, (Two months of advertising have already been used through December 2014.) |
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7 | January 10 | GBI received payment from Windy City Bikes for their order from January 3. |
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8 | January 12 | GBI paid for the inventory order that they received from Dallas Bike Basics January 7. |
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9 | 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 $14,000 due net 30. |
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10 | January 17 | Rocky Mountain Bikes in Denver, CO placed an order with GBI for $128,130 worth of bicycles to be delivered immediately. Rocky Mountain will pay the shipping. The bikes cost GBI $79,441. GBI shipped the order immediately so that Rocky Mountain can start promoting the bikes. |
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11 | January 20 | GBI received notice that Bunkys Bicycle Emporium had declared section 13 bankruptcy which meant GBI would not be able to collect the $1,460 that Bunkys owed them. |
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12 | January 20 | GBI sent a $15,000 check to Night Rider Aluminum Products for an order of bicycle parts GBI received December 30th. |
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13 | January 31 | GBI pays sales tax once a quarter via the states electronic filing and payment system. GBI filed its return and paid $3,063 in sales tax for the prior quarter ending December 31. |
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Using these account balances and additional adjustment information below, record adjusting journal entries. Adjustment information as of January 31, 20YY not already given in the original transaction(s):):
1.Production Machinery, Equipment and Fixtures were placed in service on January 1, 2010, are expected to last 20 years with 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 on a monthly basis (i.e. number of days in the month is not of consequence).
2. 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 $996.*** SEE NOTE****
3. GBI counted the office supplies (Inventory 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 $480. Any difference is expensed to supplies expense. *** SEE NOTE****
4. Liability insurance for the six month period October 1, 2014 - March 31, 2015 in the amount of $15,000 was paid September 1, 2014. Liability insurance is assumed to be utilized uniformly over the six month policy period. Determine any January 20YY expense.
5. 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. Ignore payroll taxes). *** SEE NOTE****
NOTE: You may get an error message on these entries that says Account xxx requires an assignment to a CO Object. Please see the instructions for Entering Journal Entries for how to work through this message and resolve it.
Chart of Accounts GBI GL00
G/L Account | G/L Acct Long Text |
100000 | Bank Account |
110100 | Accounts Receivable (Direct Posting Account) |
110150 | Allowance for Bad Debts |
110200 | Interest Receivable |
200600 | Inventory-Operating Supplies |
200900 | Inventory-Raw Materials (Direct Post) |
200910 | Inventory-Finished Goods (Direct Post) |
200920 | Inventory-Trading Goods (Direct Post) |
200930 | Inventory-Semi-finished Goods (Direct Post) |
210000 | Prepaid Insurance |
211000 | Prepaid Supplies |
212000 | Prepaid Advertising |
215000 | Prepaid Rent |
216000 | Deposits on Purchases |
220000 | Notes Receivable |
220110 | Land (Direct Post) |
220210 | Production Machinery, Equip & Fixtures(Dir.Post) |
220310 | Accumulated Depreciation-Machinery (Direct Post) |
220400 | Office Furniture |
220500 | Accumulated Depreciation-Office Furniture |
220600 | Office Equipment and Computers |
220700 | Accumulated Depreciation - Office Equipment |
300100 | Payables-Income Taxes |
300200 | Accounts Payable (Direct Posting Account) |
300300 | Payables-Interest |
300400 | Payables-Short-Term Notes |
300500 | Payables-Long-Term Notes |
300600 | Payables-Commissions |
300700 | Payables-Salaries and Wages |
300800 | Accrued Expenses |
310000 | Goods Receipt / Invoice Receipt Account |
320000 | Accrued Tax Output |
321000 | Accrued Tax- Input |
322000 | Unearned Revenues |
329000 | Common Stock |
329100 | Additional Paid-in-Capital |
330010 | Retained Earnings (Direct Posting) |
600000 | Sales Revenue |
610000 | Sales Discount |
620000 | Miscellaneous Revenue |
630000 | Revenue Deductions |
640000 | Gain or Loss on Sale of Assets |
650000 | Customer Service Revenue |
650100 | Customer Service Revenue Settlement |
700000 | Labor Expense |
720000 | Raw Material Consumption Expense |
720100 | Finished Product Consumption Expense |
720200 | Trading Good Consumption Expense |
720300 | Semi-Finished Consumption Expense |
740000 | Supplies Expense |
740100 | Telephone and Internet Expense |
740200 | Legal and Professional Expense |
740300 | Rent Expense |
740400 | Insurance Expense |
740500 | Payroll Expense-Office |
740600 | Payroll Expense-Administrative |
740700 | Sales Expense |
740800 | Tax Expense - Property |
740900 | Tax Expense- Income |
741000 | Miscellaneous Expense |
741100 | Warranty Expense |
741200 | Bad Debt Expense |
741300 | Information Technology Expense Account |
741500 | Utilities Expense |
741600 | Manufacturing Output settlement |
741700 | Manufacturing Output Settlement Variance |
741800 | Depreciation Expense |
741900 | Advertising Expense |
742000 | Vendor Discounts Missed |
742100 | Shipping Expense |
760000 | Purchase Price Difference |
760100 | Production Variance |
770000 | Research and Development |
780000 | Cost of Goods Sold |
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