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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

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.

2

January 3

GBI received payment of $20,750 from Northwest Bikes in Seattle, WA for the balance due on their account.

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.

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.

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.

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.)

7

January 10

GBI received payment from Windy City Bikes for their order from January 3.

8

January 12

GBI paid for the inventory order that they received from Dallas Bike Basics January 7.

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.

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.

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.

12

January 20

GBI sent a $15,000 check to Night Rider Aluminum Products for an order of bicycle parts GBI received December 30th.

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.

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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