Prepare adjusting entry from Account Balance as of Dec 31
Global Bike, Inc. Account Balances as of December 31, 20YY-1 These need to be input into SAP as your first journal entry. See Enter Journal Entry Instructions. 100000 110100 110150 200600 200900 200910 200920 210000 212000 220110 220210 220310 300200 300700 300800 320000 329000 330010 Bank Account Accounts Receivable (Direct Posting Account) Allowance for Bad Debts Inventory-Operating Supplies Inventory-Raw Materials (Direct Post) Inventory-Finished Goods (Direct Post) Inventory-Trading Goods (Direct Post) Prepaid Insurance Prepaid Advertising Land (Direct Post) Production Machinery, Equip & Fixtures(Dir.Post) Debit Balance $367,584 109,420 5,800 700 32,000 281,298 66,474 7,500 3,200 500,000 815,000 Accumulated Depreciation-Machinery (Direct Post) Accounts Payable (Direct Posting Account) Payables-Salaries and Wages Accrued Expenses Accrued Tax - Output Common Stock Retained Earnings (Direct Posting) TOTAL Credit Balance $2,183,176 203,750 48,250 115,000 988 3,063 975,000 831,325 $2,183,176 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 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. 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). 2
