Grid Iron Prep Inc. (GIPI) is a service business incorporated in January of the current year...

Prepare: journal entries, income statement, statement of retained earnings, and a balance sheet

1.	GIPI issued stock in exchange for $100,000 cash on 1/01.
2.	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.
3.	GIPI paid $260 cash on 1/03 to have the gym equipment refurbished before it could be used.
4.	GIPI provided $4,000 in training on 1/04 and expected collection in February.
5.	GIPI collected $36,000 cash in training fees on 1/10, of which $34,000 was earned in January and $2,000 would be earned in February.
6.	GIPI paid $23,000 of wages and $7,000 in utilities on 1/30.
7.	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.
8.	GIPI received a bill on 1/31 for $350 for advertising done on 1/31. The bill has not been paid or recorded.
9.	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.
10.	GIPI’s income tax rate is 30%. Assume depreciation for tax is the same amount as depreciation for financial reporting purposes.

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ekkarill92 answered 9 months ago

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