January Transactions

On 1/01, OPC paid employees salaries and wages that were previously accrued on December 31.

A truck is purchased on 1/02 for $9,500 cash. It is estimated this vehicle will be used for 50,000 miles, after which itwill have no residual value.

Payroll withholdings and employer contributions for December are remitted on 1/03.

OPC declares a $0.50 cash dividend on each share of common stock on 1/04, to be paid on 1/10.

A $1,030 customer account is written off as uncollectible on 1/05.

On 1/06, recorded sales of 175 units of inventory on account. Sales tax is charged but not yet collected or remitted to the state.

Sales taxes of $500 that had been collected and recorded in December are paid to the state on 1/07.

On 1/08, OPC issued 300 shares of treasury stock for $2,400.

Collections from customers on account, totaling $17,971, are recorded on 1/09.

On 1/10, OPC distributes the $0.50 cash dividend declared on January 4. The companys stock price is currently $5 per share.

OPC purchases on account and receives 70 units of inventory on 1/11 for $4,130.

The equipment purchased last year for $44,200 is sold on 1/15 for $45,400 cash. Record depreciation for the first half of January prior to recording the equipment disposal.

Payroll for January 1-15 is recorded and paid on 1/16. Be sure to accrue unemployment taxes and the employers matching share of FICA taxes.

Having sold the equipment, OPC pays off the note payable in full on 1/17. The amount paid is $24,228, which includes interest accrued in December and an additional $97 interest through January 17.

On 1/27, OPC records sales of 30 units of inventory on account. Sales tax is charged but not yet collected or remitted.

A portion of the advance order from December (25 units) is delivered on 1/29. No sales tax is collected on this transaction because the customer is a U.S. governmental organization that is exempt from sales tax.

To obtain funds for purchasing new equipment, OPC issued bonds on 1/30 with a total face value of $106,000, stated interest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $95,895 from the bond issuance, which implies a market interest rate of 7 percent.

On 1/31, OPC records units-of-production depreciation on the vehicle (truck), which was driven 2,000 miles this month.

OPC estimates that 2% of the ending accounts receivable balance will be uncollectible. Adjust the applicable accounts on 1/31, using the allowance method.

On 1/31, adjust for January rent expired.

Accrue January 31 payroll on 1/31, which will be payable on February 1. Be sure to accrue unemployment taxes and the employers matching share of FICA taxes.

Accrue OPCs corporate income taxes on 1/31, estimated to be $5,440.

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