Required information One Product Corp. (OPC) incorporated at the beginning of last year. The balances on its post-closing trial balance prepared on December 31, at the end of its first year of operations, were: Cash $19,510 Accounts Receivable 8,250 Allowance for Doubtful 895 Accounts Inventory 12,200 Prepaid Rent 1,620 Equipment 26, 200 Accumulated Depreciation 2,520 Accounts Payable 0 Sales Tax Payable 500 FICA Payable 600 Withheld Income Taxes 500 Payable Salaries and Wages Payable 1,600 Unemployment Tax Payable 300 Deferred Revenue 4,500 Interest Payable 497 Note Payable (long-term) 22,100 Common Stock 13,400 Additional Paid-In Capital, Common 19, 258 Retained Earnings 5, 110 Treasury Stock 4,000 The following information is relevant to the first month of operations in the following year: . . . OPC sells its inventory at $150 per unit, plus sales tax of 6%. OPC's January 1 inventory balance consists of 180 units at a total cost of $12,200. OPC's policy is to use the FIFO method, recorded using a perpetual inventory system. The $1,620 in Prepaid Rent relates to a payment made in December for January rent this year. The equipment was purchased on July 1 of last year. It has a residual value of $1,000 and an expected life of five years. It is being depreciated using the straight-line method. Employee wages are $4,000 per month. Employees are paid on the 16th for the first half of the month and on the first day of the following month for the second half of each month. Withholdings each pay period include $250 of income taxes and $150 of FICA taxes. These withholdings and the employer's matching contribution are paid monthly on the second day of the following month. In addition, unemployment taxes of $50 are accrued each pay period, and will be paid on March 31. Deferred Revenue is for 30 units ordered and paid for in advance by two customers in late December. One order of 25 units is to be filled in January, and the other will be filled in February. Notes Payable arises from a three-year, 9 percent bank loan received on October 1 last year. The par value on the common stock is $2 per share. Treasury Stock arises from the reacquisition of 500 shares at a cost of $8 per share. . . January Transactions January Transactions a. On 1/01, OPC paid employees' salaries and wages that were previously accrued on December 31. b. A truck is purchased on 1/02 for $8,000 cash. It is estimated this vehicle will be used for 50,000 miles, after which it will have no residual value. c. Payroll withholdings and employer contributions for December are remitted on 1/03. d. OPC declares a $0.50 cash dividend on each share of common stock on 1/04, to be paid on 1/10. e. A $955 customer account is written off as uncollectible on 1/05. f. 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. g. Sales taxes of $500 that had been collected and recorded in December are paid to the state on 1/07. h. On 1/08, OPC issued 300 shares of treasury stock for $2,400. i. Collections from customers on account, totaling $9,400, are recorded on 1/09. j. On 1/10, OPC distributes the $0.50 cash dividend declared on January 4. The company's stock price is currently $5 per share. K. OPC purchases on account and receives 70 units of inventory on 1/11 for $4,410. 1. The equipment purchased last year for $26,200 is sold on 1/15 for $24,400 cash. Record depreciation for the first half of January prior to recording the equipment disposal. m. Payroll for January 1-15 is recorded and paid on 1/16. Be sure to accrue unemployment taxes and the employer's matching share of FICA taxes. n. Having sold the equipment, OPC pays off the note payable in full on 1/17. The amount paid is $22,688, which includes interest accrued in December and an additional $91 interest through January 17. o. On 1/27, OPC records sales of 30 units of inventory on account. Sales tax is charged but not yet collected or remitted. p. 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. q. To obtain funds for purchasing new equipment, OPC issued bonds on 1/30 with a total face value of $91,000, stated interest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $82,325 from the bond issuance, which implies a market interest rate of 7 percent r. On 1/31, OPC records units-of-production depreciation on the vehicle (truck), which was driven 2,000 miles this month. S. OPC estimates that 2% of the ending accounts receivable balance will be uncollectible. Adjust the applicable accounts on 1/31, using the allowance method. t. On 1/31, adjust for January rent expired. u. Accrue January 31 payroll on 1/31, which will be payable on February 1. Be sure to accrue unemployment taxes and the employer's matching share of FICA taxes. v. Accrue OPC's corporate income taxes on 1/31, estimated to be $3,840. Credit No 1 Date Jan 01 General Journal Salaries and Wages Payable Cash Debit 1,600 1,600 2 Jan 02 8,000 Vehicles Cash 8,000 3 Jan 03 Withheld Income Taxes Payable FICA Payable Cash 500 600 1,100 S3 SS SS SS SS x 4 Jan 04 Dividends Dividends Payable 3 5 Jan 05 955 Allowance for Doubtful Accounts Accounts Receivable 955 6 Jan 06 27,825 Accounts Receivable Sales Revenue Sales Tax Payable 26,250 1,575 7 Jan 06 x Cost of Goods Sold Inventory 8 Jan 07 500 Sales Tax Payable Cash SSS SI 500 9 Jan 08 2,400 Cash Treasury Stock 2,400 10 Jan 09 9,400 Cash Accounts Receivable 9,400 11 Jan 10 X Dividends Payable Cash 3 12 Jan 11 4,410 Inventory Accounts Payable 4,410 13 Jan 15 x Accumulated DepreciationEquipment Depreciation Expense X X X 14 Jan 15 Cash Accumulated DepreciationEquipment Gain on Disposal of PPE Equipment X x 15 Jan 16 Salaries and Wages Expense Unemployment Tax Payable FICA Payable ssss XXXX ssssss x x X 300 X X XXX 16 Jan 17 Notes Payable (long-term) Interest Expense Interest Payable Cash X X X 17 Jan 27 Accounts Receivable Sales Revenue Sales Tax Payable X XX sss 18 Jan 27 Accounts Receivable x X 19 Jan 29 x Deferred Revenue Sales Revenue 3 X 20 Jan 29 x x x X 21 Jan 30 82,325 Cash Discount on Bonds Payable Bonds Payable X ssss 22 Jan 31 x Depreciation Expense Accumulated DepreciationVehicles X 23 Jan 31 Bad Debt Expense Allowance for Doubtful Accounts 8 x 24 Jan 31 X Rent Expense Prepaid Rent 25 Jan 31 Salaries and Wages Expense Unemployment Tax Payable FICA Payable x x x XX X x x 26 Jan 31 3,840 Income Tax Expense Income Tax Payable 3 3,840 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. Show less A Adjusted ONE PRODUCT CORP. Income Statement For the Month Ended January 31 $ $ X$ 0 0 0 X X x X 0 0 0 0 0 x 0 0 Loss(Gain) on Disposal Income from Operations $ x Income before Income Tax Expense 0 X X$ 0 0 ONE PRODUCT CORP. Statement of Stockholders' Equity For the Month Ended January 31 Additional Common Paid-In Retained Stock Capital, Earinings Common X$ 5,110 Treasury Stock x x Beginning Stock Issuances Net Income Dividends Ending 0 (3,100) X $ 2,010 x ONE PRODUCT CORP. Balance Sheet At January 31 x x $ 0 0 0 0 X X 0 0 0 X $ 0 x x 0 0 0 0 0 0 0 0 0 0 0 X X X x X x 0 x 0 0 2,010 0 x X X x $ 2,010 $ 2.010 What was OPC's total payroll cost for January? Total Payroll Cost Will the carrying value of the bond increase or decrease after recording interest in February? X What is the interest payment OPC will need to pay annually on the bond? Interest Payment What was the gain or loss was recognized on the issuance of Treasury Stock on Jan. 8? Required information One Product Corp. (OPC) incorporated at the beginning of last year. The balances on its post-closing trial balance prepared on December 31, at the end of its first year of operations, were: Cash $19,510 Accounts Receivable 8,250 Allowance for Doubtful 895 Accounts Inventory 12,200 Prepaid Rent 1,620 Equipment 26, 200 Accumulated Depreciation 2,520 Accounts Payable 0 Sales Tax Payable 500 FICA Payable 600 Withheld Income Taxes 500 Payable Salaries and Wages Payable 1,600 Unemployment Tax Payable 300 Deferred Revenue 4,500 Interest Payable 497 Note Payable (long-term) 22,100 Common Stock 13,400 Additional Paid-In Capital, Common 19, 258 Retained Earnings 5, 110 Treasury Stock 4,000 The following information is relevant to the first month of operations in the following year: . . . OPC sells its inventory at $150 per unit, plus sales tax of 6%. OPC's January 1 inventory balance consists of 180 units at a total cost of $12,200. OPC's policy is to use the FIFO method, recorded using a perpetual inventory system. The $1,620 in Prepaid Rent relates to a payment made in December for January rent this year. The equipment was purchased on July 1 of last year. It has a residual value of $1,000 and an expected life of five years. It is being depreciated using the straight-line method. Employee wages are $4,000 per month. Employees are paid on the 16th for the first half of the month and on the first day of the following month for the second half of each month. Withholdings each pay period include $250 of income taxes and $150 of FICA taxes. These withholdings and the employer's matching contribution are paid monthly on the second day of the following month. In addition, unemployment taxes of $50 are accrued each pay period, and will be paid on March 31. Deferred Revenue is for 30 units ordered and paid for in advance by two customers in late December. One order of 25 units is to be filled in January, and the other will be filled in February. Notes Payable arises from a three-year, 9 percent bank loan received on October 1 last year. The par value on the common stock is $2 per share. Treasury Stock arises from the reacquisition of 500 shares at a cost of $8 per share. . . January Transactions January Transactions a. On 1/01, OPC paid employees' salaries and wages that were previously accrued on December 31. b. A truck is purchased on 1/02 for $8,000 cash. It is estimated this vehicle will be used for 50,000 miles, after which it will have no residual value. c. Payroll withholdings and employer contributions for December are remitted on 1/03. d. OPC declares a $0.50 cash dividend on each share of common stock on 1/04, to be paid on 1/10. e. A $955 customer account is written off as uncollectible on 1/05. f. 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. g. Sales taxes of $500 that had been collected and recorded in December are paid to the state on 1/07. h. On 1/08, OPC issued 300 shares of treasury stock for $2,400. i. Collections from customers on account, totaling $9,400, are recorded on 1/09. j. On 1/10, OPC distributes the $0.50 cash dividend declared on January 4. The company's stock price is currently $5 per share. K. OPC purchases on account and receives 70 units of inventory on 1/11 for $4,410. 1. The equipment purchased last year for $26,200 is sold on 1/15 for $24,400 cash. Record depreciation for the first half of January prior to recording the equipment disposal. m. Payroll for January 1-15 is recorded and paid on 1/16. Be sure to accrue unemployment taxes and the employer's matching share of FICA taxes. n. Having sold the equipment, OPC pays off the note payable in full on 1/17. The amount paid is $22,688, which includes interest accrued in December and an additional $91 interest through January 17. o. On 1/27, OPC records sales of 30 units of inventory on account. Sales tax is charged but not yet collected or remitted. p. 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. q. To obtain funds for purchasing new equipment, OPC issued bonds on 1/30 with a total face value of $91,000, stated interest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $82,325 from the bond issuance, which implies a market interest rate of 7 percent r. On 1/31, OPC records units-of-production depreciation on the vehicle (truck), which was driven 2,000 miles this month. S. OPC estimates that 2% of the ending accounts receivable balance will be uncollectible. Adjust the applicable accounts on 1/31, using the allowance method. t. On 1/31, adjust for January rent expired. u. Accrue January 31 payroll on 1/31, which will be payable on February 1. Be sure to accrue unemployment taxes and the employer's matching share of FICA taxes. v. Accrue OPC's corporate income taxes on 1/31, estimated to be $3,840. Credit No 1 Date Jan 01 General Journal Salaries and Wages Payable Cash Debit 1,600 1,600 2 Jan 02 8,000 Vehicles Cash 8,000 3 Jan 03 Withheld Income Taxes Payable FICA Payable Cash 500 600 1,100 S3 SS SS SS SS x 4 Jan 04 Dividends Dividends Payable 3 5 Jan 05 955 Allowance for Doubtful Accounts Accounts Receivable 955 6 Jan 06 27,825 Accounts Receivable Sales Revenue Sales Tax Payable 26,250 1,575 7 Jan 06 x Cost of Goods Sold Inventory 8 Jan 07 500 Sales Tax Payable Cash SSS SI 500 9 Jan 08 2,400 Cash Treasury Stock 2,400 10 Jan 09 9,400 Cash Accounts Receivable 9,400 11 Jan 10 X Dividends Payable Cash 3 12 Jan 11 4,410 Inventory Accounts Payable 4,410 13 Jan 15 x Accumulated DepreciationEquipment Depreciation Expense X X X 14 Jan 15 Cash Accumulated DepreciationEquipment Gain on Disposal of PPE Equipment X x 15 Jan 16 Salaries and Wages Expense Unemployment Tax Payable FICA Payable ssss XXXX ssssss x x X 300 X X XXX 16 Jan 17 Notes Payable (long-term) Interest Expense Interest Payable Cash X X X 17 Jan 27 Accounts Receivable Sales Revenue Sales Tax Payable X XX sss 18 Jan 27 Accounts Receivable x X 19 Jan 29 x Deferred Revenue Sales Revenue 3 X 20 Jan 29 x x x X 21 Jan 30 82,325 Cash Discount on Bonds Payable Bonds Payable X ssss 22 Jan 31 x Depreciation Expense Accumulated DepreciationVehicles X 23 Jan 31 Bad Debt Expense Allowance for Doubtful Accounts 8 x 24 Jan 31 X Rent Expense Prepaid Rent 25 Jan 31 Salaries and Wages Expense Unemployment Tax Payable FICA Payable x x x XX X x x 26 Jan 31 3,840 Income Tax Expense Income Tax Payable 3 3,840 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. Show less A Adjusted ONE PRODUCT CORP. Income Statement For the Month Ended January 31 $ $ X$ 0 0 0 X X x X 0 0 0 0 0 x 0 0 Loss(Gain) on Disposal Income from Operations $ x Income before Income Tax Expense 0 X X$ 0 0 ONE PRODUCT CORP. Statement of Stockholders' Equity For the Month Ended January 31 Additional Common Paid-In Retained Stock Capital, Earinings Common X$ 5,110 Treasury Stock x x Beginning Stock Issuances Net Income Dividends Ending 0 (3,100) X $ 2,010 x ONE PRODUCT CORP. Balance Sheet At January 31 x x $ 0 0 0 0 X X 0 0 0 X $ 0 x x 0 0 0 0 0 0 0 0 0 0 0 X X X x X x 0 x 0 0 2,010 0 x X X x $ 2,010 $ 2.010 What was OPC's total payroll cost for January? Total Payroll Cost Will the carrying value of the bond increase or decrease after recording interest in February? X What is the interest payment OPC will need to pay annually on the bond? Interest Payment What was the gain or loss was recognized on the issuance of Treasury Stock on Jan. 8