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 $19,780 8,350 1,065 14,580 1,960 46,600 4,560 Cash Accounts Receivable Allowance for Doubtful Accounts Inventory Prepaid Rent Equipment Accumulated Depreciation Accounts Payable Sales Tax Payable FICA Payable Withheld Income Taxes Payable Salaries and Wages Payable Unemployment Tax Payable Deferred Revenue Interest Payable Note Payable (long-term) Common Stock Additional Paid-In Capital, Common Retained Earnings Treasury Stock 500 600 500 1,600 300 4,500 536 23,800 18,500 19,745 18,740 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 $14,580. OPC's policy is to use the FIFO method, recorded using a perpetual inventory system . The $1,960 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 1 On 1/01, OPC paid employees' salaries and wages that were previously accrued on December 31. Record the transaction A truck is purchased on 1/02 for $10,500 cash. It is estimated this vehicle will be used for 50,000 miles, after which it will have no residual value. Record the transaction. 2 3Payroll withholdings and employer contributions for December are remitted on 1/03. Record the transaction. 4 OPC declares a $0.50 cash dividend on each share of common stock on 1/04, to be paid on 1/10. Record the transaction 5 A $1,040 customer account is written off as uncollectible on 1/05. Record the transaction 6 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. Record the sale transaction. 7 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. Record the cost of goods sold. 8 Sales taxes of $500 that had been collected and recorded in December are paid to the state on 1/07. Record the transaction 9 On 1/08, OPC issued 300 shares of treasury stock for $2,400. Record the transaction 10 Collections from customers on account, totaling $18,071, are recorded on 1/09. Record the transaction. On 1/10, OPC distributes the $0.50 cash dividend declared on January 4. The company's stock price is currently $5 per share. Record the transaction OPC purchases on account and receives 70 units of inventory on 1/11 for $4,620. Record the transaction. 13 The equipment purchased last year for $46,600 is sold on 1/15 for $48,200 cash. Record depreciation for the first 14 The equipment purchased last year for $46,600 is sold on 1/15 for $48,200 cash. Record the equipment disposal. 15 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. Record the transaction 16 Having sold the equipment, OPC pays off the note payable in full on 1/17. The amount paid is $24,434, which includes interest accrued in December and an additional $198 interest through January 17. Record the transaction on 1/27, OPC records sales of 30 units of inventory on account. Sales tax is charged but not yet collected or remitted. Record the sale transaction. On 1/27, OPC records sales of 30 units of inventory on account. Sales tax is charged but not yet collected or remitted. Record the cost of goods sold 18 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 United States governmental organization that is exempt from sales tax. Record the sale transaction. 19 20 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 United States governmental organization that is exempt from sales tax. Record the cost of goods sold. 21 To obtain funds for purchasing new equipment, OPOC issued bonds on 1/30 with a total face value of $108,000, stated interest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $97,704 from the bond issuance, which implies a market interest rate of 7 percent. Record the transaction. on 1/31, OPC records units-of-production depreciation on the vehicle (truck), which was driven 2,000 miles this month. Record the transaction 23 OPC estimates that 2% of the ending accounts receivable balance will be uncollectible. Adjust the applicable accounts on 1/31, using the allowance method. Record the transaction. On 1/31, adjust for January rent expired. Record the transaction 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. Record the trancartinn the transaction Accrue OPC's corporate income taxes on 1/31, estimated to be $5,140. Record the transaction. 26 Adjusted ONE PRODUCT CORP Income Statement For the Month Ended January 31 0 0 Loss(Gain) on Disposal Income from Operations Income before Income Tax Expense 0 0 detenine and enter the beginning and ending Dalances Adjusted- ONE PRODUCT CORP Statement of Stockholders' Equity For the Month Ended January 31 Common Stock Additional Paid- In Capital, Retained Common Treasury Stock Earinings Beginning 18,740 Stock Issuances Net Income Dividends 0 (4,375) Ending $14,365 Income Statement Balance Sheet> 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. Adjustedv ONE PRODUCT CORP Balance Sheet At January 31 Assets Current Assets $140,446 21,834 Cash Accounts Receivable 162,280 0 Total Current Assets $162,280 Liabilities Liabilities Current Liabilities Total Current Liabilities Stockholders' Equity 14,365 Total Stockholders' Equity Total Liabilities and Stockholders' Equity $14,365 $14,365 General Journal General Requirement alance Sheet Analysis Ledger Trial BalanceIncome Statement of Statement Stockholders B Equity 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? 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