10

January 12

GBI paid for the inventory order (via bank transfer) that they received from Dallas Bike Basics back on January 3.

11

January 13

In order to better track inventory, GBI ordered a bar-coding and tracking system which will be installed and tested by Computer Specialists, Inc. (CSI). The system will allow employees to track inventory using mobile devices and special software which will link into their new computerized accounting system. The barcode system costs $6,000 (including sales tax) and CSI will charge GBI $1,300 for the installation and tests. GBI paid a deposit of $2,500 on the system and the remainder is due and payable when the system is installed. GBI will classify the bar-coding system as Production Machinery, Equipment and Fixtures.

h

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 $15,890 due net 30.

13

The city of Denver will be hosting a decathlon at the end of February. The event is expected to create demand for high quality bikes. Rocky Mountain Bikes in Denver, CO placed an order with GBI for $128,000 worth of bicycles to be delivered immediately. Rocky Mountain will pay the shipping. The bikes cost GBI $78,000. GBI shipped the order immediately so that Rocky Mountain can start promoting the bikes. Because Rocky Mountain is a good customer, GBI is giving them special terms of net 45 days on this order.

14

GBI received raw materials inventory ordered from Space Bike Composites January 11. Shipping charges of $600 were included in the invoice from Space Bike.

15

GBI received notice that Bunkys Bicycle Emporium had declared section 13 bankruptcy which meant GBI would not be able to collect the $4,200 that Bunkys owed them.

Debit Balance

Credit Balance

100000

Bank Account

$300,318

110100

Accounts Receivable (Direct Posting Account)

94,670

110150

Allowance for Bad Debts

2,600

200600

Inventory-Operating Supplies

8,832

200900

Inventory-Raw Materials (Direct Post)

52,000

200910

Inventory-Finished Goods (Direct Post)

281,298

200920

Inventory-Trading Goods (Direct Post)

66,474

210000

Prepaid Insurance

3,000

212000

Prepaid Advertising

2,400

220110

Land (Direct Post)

528,000

220210

Production Machinery, Equip & Fixtures (Dir.Post)

915,000

220310

Accumulated Depreciation-Machinery (Direct Post)

408,000

300200

Accounts Payable (Direct Posting Account)

48,000

300700

Payables-Salaries and Wages

94,313

300800

Accrued Expenses

2,200

320000

Accrued Tax Output

4,000

329000

Common Stock

1,010,000

329100

Additional Paid-in-Capital

52,870

330010

Retained Earnings (Direct Posting)

630,009