Need Journal Entry, Income Statement, Statement of Retained Earnings, and Balanc

Question

Need Journal Entry, Income Statement, Statement of Retained Earnings, and Balance Sheet

Grid Iron Prep Inc. (GIPI) is a service business incorporated in January of the current year to provide personal training for athletes aspiring to play college football. The following transactions occurred during the month ended January 31 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 9. GIPI uses the aging method for estimating doubtful accounts and, on 1/31, will record an estimated 3 10.GPs income tax rate is 30%. Assume depreciation for tax is the same amount as depreciation for or recorded. percent of its under 30 day-old accounts as not collectible financial reporting purposes

Explanation / Answer

01-Jan Cash 100000 Common Stock 100000 02-Jan Gymnasium 40000 (50000*80%) Equipment 10000 (50000*20%) Cash 50000 03-Jan Gymnasium 260 Cash 260 04-Jan Accounts Receivable 4000 Service Revenue 4000 10-Jan Cash 36000 Service Revenue 34000 Advance from customer 2000 30-Jan Wages 23000 Utilities 7000 Cash 30000 31-Jan Depreciation -Gym 159 Depreciation -Equipment 417 Accumulated Depreciation-Gym 159 Accumulated Depreciation-Equipment 417 31-Jan Advertising Exp 350 Accounts Payable 350 31-Jan Bad Debt 120 (4000*3%) Allowance for Debt 120 31-Jan Tax Exense 2086 Provision for Tax 2086 Gym Cost 40000 Add: Refurbish 260 40260 Less: Residual value 2000 38260 Divibe by Life 20 Annual depareciation 1913 Monthly depreciation 159 (1913/12) Equipment 10000 Rate 25% (1/life) Double declining rate 50% (25%*2) Annual depreciation 5000 (10000*50%) Monthly Depreciation 417 (5000/12) Income Statement Service Revenue 38000 (34000+4000) Less: Wages 23000 Utilities 7000 Depreciation -Gym 159 Depreciation -Equipment 417 Advertising Exp 350 Bad Debt 120 Profit Before Tax 6954 Less: Tax @30% 2086 Net Profit 4868 Statement of Equity Common Stock 100000 Add: Profit for the month 4868 104868 BALANCE Sheet Gymnasium 40260 Common Stock 100000 Equipment 10000 Profit 4868 Cash 55740 Accounts Payable 350 Accounts receivable 4000 Provision for Tax 2086 Allowance for Debt 120 Advance from customer 2000 Accumulated Depreciation-Gym 159 Accumulated Depreciation-Equipment 417        110,000          110,000

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