One Trick Pony (OTP) Incorporated and began operations near the end of the year, resulting in the following post-closing balances at December 31: Cash Accounts Receivable Allowance for Doubtful Accounts Inventory Deferred Revenue (40 units) Accounts Payable Notes Payable (long-term) $ 28,340 12,310 980 2,000 5,600 1,170 24,000 6,200 4,700 Common Stock Retained Earnings credit balance. The following information is relevant to the first month of operations in the following year: OTP will sell inventory at $140 per unit. OTP's January 1 inventory balance consists of 50 units at a total cost of $2.000. OTP's policy is to use the FIFO method, recorded using a perpetual inventory system. In December, OTP received a $5,600 payment for 40 units OTP is to deliver in January; this obligation was recorded in Deferred Revenue. Rent of $1,400 was unpaid and recorded in Accounts Payable at December 31. OTP's notes payable mature in three years, and accrue interest at a 10% annual rate. January Transactions a. Included in OTP's January 1 Accounts Receivable balance is a $2.400 balance due from Jeff Letrotski. Jeff is having cash flow problems and cannot pay the $2,400 balance at this time. On 01/01, OTP arranges with Jeff to convert the $2,400 balance to a six- month note: at 10% annual interest. Jeff signs the promissory note, which indicates the principal and all interest will be due and payable to OTP on July 1 of this year, b. OTP paid a $560 Insurance premium on 01/02, covering the month of January; the payment is recorded directly as an expense. c. OTP purchased an additional 200 units of inventory from a supplier bn account on 01/05 at a total cost of $8,000, with terms n/30. d. OTP paid a courier $400 cash on 01/05 for same-day delivery of the 200 units of inventory. e. The 40 units that OTP's customer paid for in advance in December are delivered to the customer on 01/06. On 01/07, OTP received a purchase allowance of $1,200 on account, and then paid the amount necessary to settle the balance owed to the supplier for the 1/05 purchase of Inventory (in c). g. Sales of 60 units of inventory occurring during the period of 01/07-01/10 are recorded on 01/10. The sales terms are n/30. h. Collected payments on 01/14 from sales to customers recorded on 01/10 LOTP paid the first 2 weeks' wages to the employees on 01/16. The total paid is $2,880. Wrote off a $950 customer's account balance on 01/18. OTP uses the allowance method, not the direct write-off method. Paid $2.800 on 01/19 for December and January rent. See the earlier bullets regarding the December portion. The January portion will expire soon, so it is charged directly to expense. LOTP recovered $430 cash on 01/26 from the customer whose account had previously been written off on 01/18 m. An unrecorded $300 utility bill for January arrived on 01/27. It is due on 02/15 and will be paid then. n. Sales of 70 units of Inventory during the period of 01/10-01/28, with terms n/30, are recorded on 01/28 o Of the sales recorded on 01/28, 10 units are returned to OTP on 01/30. The inventory is not damaged and can be resold. OTP charges sales returns to a contra-revenue account. p. On 01/31, OTP records the $2,880 employee salary that is owed but will be paid February 1. q. OTP uses the aging method to estimate and adjust for uncollectible accounts on 01/31. All of OTP's accounts receivable fall into a single aging category, for which 10% is estimated to be uncollectible. (Update the balances of both relevant accounts prior to determining the appropriate adjustment.) Accrue Interest for January on the notes payable on 01/31 s. Accrue interest for January on Jeff Letrotski's note on 01/31 (see a No Date General Journal Debit Credit 1 January 01 Notes Receivable (short-term) 2,400 Accounts Receivable 2,400 2 January 02 Insurance Expense Cash 560 560 3 January 05 Inventory 8,000 Accounts Payable 8,000 4 January 05 Inventory 400 80 Cash 180 400 5 January 06 Deferred Revenue. 5,600 Sales Revenue 5,600 6 January 06 Cost of Goods Sold 1,600 Inventory 1,600 7 January 07 Accounts Payable 1,200 Inventory 1,200 13 8 January 07 Accounts Payable 6,800 Cash 6,800 9- January 10 Accounts Receivable Sales Revenue 10 January 10 Cost of Goods Sold 2,200 Inventory 2,200 1.21 11 January 14 Cash Accounts Receivable 12 January 16 Salaries and Wages Expense Cash 2,880 2,880 ces 13 January 18 Allowance for Doubtful Accounts 950 Accounts Receivable 950 14 January 19 Rent Expense Accounts Payable Cash 1,400 1,400 2,800 15 15 January 26 Accounts Receivable 430 Allowance for Doubtful Accounts 430 16 January 20 Cash Accounts Receivable 430 430 18 January 28 Accounts Receivable Sales Revenue 19 January 28 Cost of Goods Sold 2,520 Inventory 2,520 20 20 January 30 Sales Revenue Accounts Receivable 21 January 30 Inventory Cost of Goods Sold 22 22 23 23 January 31 Salaries and Wages Expense Salaries and Wages Payable '' January 31 Bad Debt Expense 24 January 31 Allowance for Doubtful Accounts Interest Expense Interest Payable 25 January 31 Interest Receivable Interest Revenue 360 2,880 360 2,880 200 200 20 20 No. "Date Debit Credit Balance No. December 31 28,340 Date December 31 Debit Credit Balance 12,310 2 January 02 560 27,780 1 January 01 2,400 9,910 4 January 05 8 January 07 12 January 16 14 January 19 400 27,380 13 January 18 950 8,960 6,800 20,580 15 January 26 430 9,390 2,880 17,700 16 January 26 430 8,960 2,800 14,900 16 January 26 430 30 15,330 Allowance for Doubtful Accounts Notes Receivable (short-term) No. Date December 31 Debit Credit Balance No. 980 Date December 31 Debit 13 January 18 15 January 26 950 30 1 January 01 2,400 430 460 No. Date December 31 25 January 31 Interest Receivable Debit 20 Credit Balance 0 2,400 Inventory Credit Balance No. 0 Date December 31 Debit Credit Balance 2,000 B 20 3 January 05 8.000 10,000 4 January 05 400 10,400 6 January 06 1,600 8,800 7 January 07 1,200 7,600 10 January 10 2,200 5,400 19 January 28 2,520 2,880 21 January 30 360 3,240 Accounts Payable Credit Balance 0 200 200 Date December 31 Interest Payable Debit No. Date Debit Credit. Balance No. December 31 1,170 3 January 05 8,000 9,170 24 January 31 7 January 07 1,200 7,970 8 January 07 6,800 1,170 14 January 19 1,400 (230) 17 January 27 300 70 6644 Salaries and Wages Payable No. Date Debit December 31 22 January 31 14 Deferred Revenue Credit Balance No. 0 2,880 Date December 31 2,880 5 January 06 Debit Credit Balance 5,600 5,600 0 Credit Balance No. 24,000 Date December 31 Common Stock Debit Credit Balance 6,200 Interest Revenue Credit Balance No. 4,700 Date December 31 Debit Credit 25 January 31 20 Balance 0 20 Notes Payable (long-term) No. Date Debit December 31 Retained Earnings No. Date Debit December 31 7 No. Date: December 31 5 January 06 No. Date: December 31 Sales Revenue Debit Cost of Goods Sold Credit Balance No. Date Debit Credit Balance 0 December 31 0 5,600 5,600 3333 6 January 06 1,600 1,600 10 January 10 2,200 3,800 19 January 28 2,520 6,320 21 January 30 360 5,960 Interest Expense Credit Balance No. Date Debit Credit Balance 0 December 31 0 560 24 January 31 200 200 Insurance Expense Debit 2 January 02 560 Rent Expense Salaries and Wages Expense Date December 31 No. 14 January 19 1,400 Debit Credit Balance No. Date Debit 0 December 31 1,400 44 12 January 16 2,880 22 January 31 2,880 Credit Balance 0 2,880 5,760 11. No. Date December 31 17 January 27 Utilities Expense Debit 300 Credit Balance. 0 300 77 777 Cash Accounts Receivable Allowance for Doubtful Accounts Notes Receivable (short-term) Interest Receivable Inventory Accounts Payable Interest Payable Salaries and Wages Payable Notes Payable (long-term) Common Stock Retained Eamings Interest Revenue Sales Revenue Cost of Goods Sold Insurance Expense Interest Expense Rent Expense Salaries and Wages Expense Utilities Expense Total January 31, 2023 Account Title Debit Credit 15,330 8,960 460 5 2,400 20 3,240 70 200 2,880 24,000 6,200 4,700 20 5,600 5,960 560 200 1,400 5,760 300 44,130 $ 44,130 Adjusted 52:06 Net Sales k ces ONE TRICK PONY Income Statement For the Month Ended January 31 Income from Operations Interest Revenue (Expense), net 69 $ 69 000 $ 6969 $ 0 0 0 0 + 0 0 0 0 69 $ 0 180 EA $ (180) Adjusted ONE TRICK PONY Statement of Retained Earnings For the Month Ended January 31 Balance, January 1 $ Balance, January 31 $ 69 4,700 4,700 2:35 35 Current Assets Total Assets Balance Sheet At December 31 Assets es Liabilities Current Liabilities Total Current Liabilities Total Liabilities 69 Stockholders' Equity Total Stockholders' Equity Total Liabilities and Stockholders' Equity 0 0 0 0 0 0 $ 0 0 00 $ $ 0 27 For the month ended January 31, indicate the (1) gross profit percentage, (ii) number of units in ending inventory, and (ii) cost per unit of ending inventory (Round percentage answer to 1 decimal place.) Gross profit percentage Number of units in ending inventory Cost per unit of ending inventory % Units per Unit If OTP had used the percentage of sales method (using 2% of Net Sales) rather than the aging method, what amounts would OTC's January financial statements have reported for (1) Bad Debt Expense and (1) Accounts Receivable, net? Bad Debt Expense Accounts Receivable, net If OTP had used LIFO rather than FIFO, what amount would OTC have reported for Cost of Good Sold on 01/102 Cost of Goods Sold