Question

JOURNAL ENTRIES OF:

16	January 18	GBI received a $90,000 funds transfer from Silicon Valley Bikes in Palo Alto for the balance due on their account.
17	January 19	GBI paid Staples for the office supplies they received January 11.
18		SoCal Bikes in Irvine, CA placed an order for $2,750 in bicycle helmets for a special event in February. The merchandise cost GBI $1,300. SoCal sent a truck to the GBI distribution center in San Diego, CA and picked up the merchandise directly from GBI’s warehouse. Terms of payment are net 30. (Don’t forget to charge sales tax of 7.75% for this order.)
19	January 24	Beantown Bikes in Boston, MA placed an order with GBI for $27,000 in bicycles. The cost of the bicycles is $17,000. Beantown Bikes is a new customer. Its buyers saw GBI’s booth at a trade show. Because Beantown is a new customer, they must either wait until their credit can be approved or pay for the order before GBI will ship the bikes to them.
20	January 25	GBI has been offered the opportunity to advertise in the Bicycle Times online magazine for a reduced price if they pay for three months in advance. In light of the upcoming Tour de France, the advertising is a great opportunity for GBI to get additional recognition. The advertising will start in February. GBI wrote a check for $9,000 for three months of advertising.
21	January 26	GBI received notification from their bank that Beantown Binkes had transferred funds into their account for their prior order, so GBI’s warehouse personnel shipped Beantown’s order. Beantown will be responsible for paying Fed-X $400 for shipping the order.
22	January 27	The county approved GBI’s building plans for their new warehouse. Estimated building costs are $1,300,000 which will be funded via a mortgage from Bank of America. GBI plans to break ground on the new building April 18th of this year.
23		GBI sent a $32,000 check to Night Rider Aluminum Products for an order of bicycle parts GBI received December 30th.
24	No transaction	Big Apple Bikes in New York City is expanding to another location in New York and needs to stock the new location. GBI received a phone order from Big Apple for $250,000 in bicycles and $108,500 in bicycle accessories and safety gear at special discount prices. The cost of the bicycles in this order is $185,000 and the cost of the accessories is $65,000. Big Apple will have a contract trucking company pick up the order when it is ready. The order is sent to GBI’s warehouse for picking and packing, which may take a couple days. Payment terms to Big Apple for this order are net 30.
25		GBI pays sales tax once a quarter via the state’s electronic filing and payment system. GBI filed its return and paid its sales tax for the quarter ending December 31.
26		GBI paid February’s rent of $4,000 for the office and warehouse space in San Diego.
27		CSI installed and tested the new barcode system. The warehouse manager approved the installation and commented that she thinks it works great. GBI wrote a check to CSI for the balance owed and gave it to the installer.
28		Big Apple’s truck arrived at GBI’s warehouse and picked up the order from January 27th.

Answer 1

No	Date	Accounts	Debit	Credit
16	18-Jan	Cash	$        90,000
		Accounts Receivable		$        90,000
17	19-Jan	Office supplies
		Cash
		(Amount missing)
18		Accounts Receivable (2750*107.75%)	2963.125
		Sales		$          2,750
		Sales Tax payable		$              213
19	24-Jan	No Entry
20	25-Jan	Prepaid Advertising	$          9,000
		Cash		$          9,000
21	26-Jan	Accounts Receivable	$        27,400
		Sales		$        27,400
		Cash		$              400
		Cost of good sold	$        17,000
		Inventory-Trading Goods (Direct Post)		$        17,000
22	27-Jan	No Entry
23		Accounts Paybale	32000
		Cash		$        32,000
24		No Entry
25	31-Jan	Accrued Tax – Output
		Cash
		(Amount missing)
26		Rent expenses	$          4,000
		Cash		$          4,000
27
		(Amount missing)
28
		Accounts Receivable	0
		Sales		$                 -
		Cost of good sold	0
		Inventory-Finished Goods (Direct Post)		$                 -
		Inventory-Trading Goods (Direct Post)		$                 -
		(Amount missing)