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	$	41,210
Accounts Receivable		12,950
Allowance for Doubtful Accounts		370	*
Inventories		2,000
Deferred Revenue (40 units)		6,000
Accounts Payable		1,920
Note Payable (long-term)		24,000
Common Stock		19,800
Retained Earnings		4,070

* credit balance.

The following information is relevant to the first month of operations in the following year:

• OTP will sell inventory at $150 per unit. OTPs January 1 inventory balance consists of 50 units at a total cost of $2,000. OTPs policy is to use the FIFO method, recorded using a perpetual inventory system.
• In December, OTP received a $6,000 payment for 40 units OTP is to deliver in January; this obligation was recorded in Deferred Revenue. Rent of $1,220 was unpaid and recorded in Accounts Payable at December 31.
• OTPs note payable matures in three years, and accrues interest at a 10% annual rate.

January Transactions

1. Included in OTPs 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.
2. OTP paid a $180 insurance premium on 01/02, covering the month of January; the payment is recorded directly as an expense.
3. OTP purchased an additional 200 units of inventory from a supplier on account on 01/05 at a total cost of $8,000, with terms n/30.
4. OTP paid a courier $400 cash on 01/05 for same-day delivery of the 200 units of inventory.
5. The 40 units that OTPs customer paid for in advance in December are delivered to the customer on 01/06.
6. 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).
7. Sales of 60 units of inventory occurring during the period of 01/0701/10 are recorded on 01/10. The sales terms are n/30.
8. Collected payments on 01/14 from sales to customers recorded on 01/10.
9. OTP paid the first 2 weeks wages to the employees on 01/16. The total paid is $4,940.
10. Wrote off a $1,010 customers account balance on 01/18. OTP uses the allowance method, not the direct write-off method.
11. Paid $2,440 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.
12. OTP recovered $450 cash on 01/26 from the customer whose account had previously been written off on 01/18.
13. An unrecorded $120 utility bill for January arrived on 01/27. It is due on 02/15 and will be paid then.
14. Sales of 70 units of inventory during the period of 01/1001/28, with terms n/30, are recorded on 01/28.
15. 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 directly against Sales Revenue.
16. On 01/31, OTP records the $4,940 employee salary that is owed but will be paid February 1.
17. OTP uses the aging method to estimate and adjust for uncollectible accounts on 01/31. All of OTPs 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.)
18. Accrue interest for January on the note payable on 01/31.
19. Accrue interest for January on Jeff Letrotskis note on 01/31 (see a).

No Date General Journal Debit Credit 1 Jan 01 2,400 Notes Receivable (short-term) Accounts Receivable 2,400 _2 Jan 02 180 Insurance Expense Cash 180 3 Jan 05 8,000 Inventory Accounts Payable 8,000 4 Jan 05 400 Inventory Cash 400 5 Jan 06 Deferred Revenue 4,500 Sales Revenue 4,500 6 Jan 06 Cost of Goods Sold Inventory 7 Jan 07 1,200 Accounts Payable Inventory 1,200 8 Jan 07 8,000 Accounts Payable Cash Inventory 8,000 9 Jan 10 Accounts Receivable Sales Revenue 10 Jan 10 Cost of Goods Sold Inventory 11 Jan 14 Cash Accounts Receivable 12 Jan 16 4,940 Salaries and Wages Expense Cash 4,940 14 Jan 19 Rent Expense Accounts Payable Cash 2,440 15 Jan 26 Accounts Receivable 450 Allowance for Doubtful Accounts 450 16 Jan 26 Cash 450 Accounts Receivable 450 17 Jan 27 120 Utilities Expense Accounts Payable 120 18 Jan 28 Accounts Receivable Sales Revenue 19 Jan 28 Cost of Goods Sold Inventory 20 Jan 30 Sales Revenue Accounts Receivable 21 Jan 30 Inventory Cost of Goods Sold 22 Jan 31 4,940 Salaries and Wages Expense Salaries and Wages Payable 4,940 23 Jan 31 Bad Debt Expense Allowance for Doubtful Accounts 24 Jan 31 Interest Expense Interest Payable 25 Jan 31 Interest Receivable Interest Revenue Requirement Journal Ledger Trial Balance Balance Sheet Statement Retained Analysis Earnings Each journal entry is posted automatically to the general ledger. Use the drop-down button to view the unadjusted, adjusted, or post-closing balances. Adjusted General Ledger Account Cash Accounts Receivable No. Debit Credit No. Date Debit Credit Date Dec 31 Jan 02 Jan 05 Jan 07 2 4 1 2,400 1,010 13 Balance 41,210 41,030 40,630 32,630 27,690 25,250 25,700 Dec 31 Jan 01 Jan 18 Jan 26 Jan 26 180 400 8,000 4,940 2,440 Balance 12,950 10,550 9,540 9,990 9,540 8 15 450 12 16 450 14 Jan 16 Jan 19 Jan 26 16 450 Allowance for Doubtful Accounts No. Debit Credit No. Balance Date Dec 31 Jan 18 Jan 26 0 Balance 370 (640) (190) Notes Receivable (short-term) Date Debit Credit Dec 31 Jan 01 2,400 13 1,010 1 2,400 15 450 Inventory Accounts Payable No. Debit Credit No. Date Debit Credit 3 Date Dec 31 Jan 05 Jan 05 Jan 07 Balance 2,000 10,000 10,400 9,200 3 8,000 400 8,000 Balance 1,920 9,920 8,720 720 840 4 Dec 31 Jan 05 Jan 07 Jan 07 Jan 27 7 1,200 8,000 7 1,200 8 17 120 Salaries and Wages Payable Deferred Revenue No. Debit Credit Balance No. Date Debit Credit Date Dec 31 Jan 31 Balance 6,000 1,500 22 4,940 4,940 5 Jan 06 4,500 Jan 27 Salaries and Wages Payable Deferred Revenue No. Date Debit Credit Balance No. Date Debit Credit 0 Dec 31 Jan 31 Balance 6,000 1,500 22 4,940 4,940 5 Jan 06 4,500 Common Stock Notes Payable (long-term) Debit Credit No. No. Date Debit Credit Date Dec 31 Balance 24,000 Balance 19,800 Dec 31 Sales Revenue Retained Earnings Debit Credit No. No. Debit Credit Balance Date Dec 31 Balance 4,070 Date Dec 31 Jan 06 0 4,500 5 4,500 Insurance Expense Salaries and Wages Expense Debit Credit No. Debit Credit Balance No. Date Balance Date Dec 31 Jan 02 0 0 Dec 31 Jan 16 2 180 180 12 4,940 4,940 4,940 9,880 22 Jan 31 Utilities Expense Debit Credit No. Date Balance 0 Dec 31 Jan 27 17 120 120 Requirement General Journal General Ledger Trial Balance Income Statement Statement of Retained Earnings Balance Sheet Analysis Notice the dropdown below that gives the options to select the unadjusted, adjusted or post-closing trial balance. The option you choose will be the values used to populate the income statement and balance sheet tabs. Adjusted ONE TRICK PONY Trial Balance January 31, 2021 Account Title Credit $ Debit 25.700 9,540 190 2,400 9.200 840 Cash Accounts Receivable Allowance for Doubtful Accounts Notes Receivable (short-term) Inventory Accounts Payable Salaries and Wages Payable Deferred Revenue Notes Payable (long-term) Common Stock Retained Earnings Sales Revenue Insurance Expense Salaries and Wages Expense Utilities Expense Total 4,940 1,500 24,000 19,800 4,070 4,500 180 9,880 120 $ 57,210 $ 59,650 Requirement General Journal General Ledger Trial Balance Income Statement Statement of Retained Earnings Balance Sheet Analysis Choose the appropriate accounts to be reported on the income statement. Select the 'adjusted' from the dropdown, which will then populate the balances in those accounts from the trial balance. However, you will need to calculate and enter the amount of the net income or loss for the period. Adjusted ONE TRICK PONY Income Statement For the Month Ended January 31 Deferred Revenue 1,500 $ 0 $ 1,500 0 0 0 0 0 0 $ 1,500 Income from Operations Interest Revenue (Expense), net 0 $ 1,500 Requirement General Journal General Ledger Trial Balance Income Statement Statement of Retained Earnings Balance Sheet Analysis Prepare the statement of retained earnings at the end of January 31. You will need to determine and enter the accounts and balances to prepare the Statement of Retained Earnings. Adjusted ONE TRICK PONY Statement of Retained Earnings For the Month Ended January 31 Balance, January 1 $ Add: Net Income 4,070 1,500 Less: Dividends Balance, December 1 $ 5,570 Requirement General Journal General Ledger Trial Balance Income Statement Statement of Retained Earnings Balance Sheet Analysis Use the dropdowns to select the accounts properly included on the classified balance sheet. The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection. You will need to determine and enter the balance of the Common Stock and Retained Earnings accounts in the Stockholders' Equity section. Adjusted ONE TRICK PONY Balance Sheet At December 31 $ 0 0 0 0 0 $ 0 0 0 0 0 0 $ 0 0 0 $ 0 Requirement General Journal General Ledger Trial Balance Income Statement Statement of Retained Earnings Balance Sheet Analysis For the month ended January 31, indicate the (i) gross profit percentage, (ii) number of units in ending inventory, and (iii) 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 (0) Bad Debt Expense and (ii) 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 Goods Sold on 01/10? Cost of Goods Sold