Required information [The following information applies to the questions displayed below.) One Product Corporation (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 20,080 Accounts Receivable 8,248 Allowance for Doubtful Accounts 955 Inventory 12,600 Prepaid Rent 1,740 Equipment 33,400 Accumulated Depreciation 3,240 Accounts Payable Sales Tax Payable 500 FICA Payable 600 Withheld Income Taxes Payable 500 Salaries and Wages Payable 1,600 Unemployment Tax Payable 300 Deferred Revenue 4,500 Interest Payable 511 Notes Payable (long-term) 22,700 Common Stock 15,200 Additional Paid-In Capital, Connon 19,544 Retained Earnings 9.910 Treasury Stock 4,000 The following information is relevant to the first month of operations in the following year: 4,00 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 percent. OPC's January 1 inventory balance consists of 180 units at a total cost of $12,600. OPC's policy is to use the FIFO method, recorded using a perpetual inventory system The $1740 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 a. On 101, OPC paid employees' salaries and wages that were previously accrued on December 31 b. A truck is purchased on 102 for $11,000 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 $985 customer account is written off as uncollectible on 105. 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 108, OPC issued 300 shares of treasury stock for $2,400. Collections from customers on account, totaling $14,886, are recorded on 1/09. 1 On 110. 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 111 for $4,480. The equipment purchased last year for $33,400 is sold on 1/15 for $32,800 cash. Record depreciation for the first half of January prior to recording the equipment disposal. m. Payroll for January 115 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 $23,304, which includes interest accrued in December and an additional $93 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 $97,000, stated interest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $87753 from the bond the state. 9. Sales taxes of $500 that had been collected and recorded in December are paid to the state on V07. h. On 108, OPC issued 300 shares of treasury stock for $2.400 Collections from customers on account, totaling $14,886, are recorded on 109. 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 V11 for $4,480. 2. The equipment purchased last year for $33,400 is sold on 1/15 for $32,800 cash. Record depreciation for the first half of January prior to recording the equipment disposal. m. Payroll for January 115 is recorded and paid on 116. 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 117. The amount paid is $23,304, which includes interest accrued in December and an additional $93 interest through January 17, o. On 127, 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 4/29. No sales tax is collected on this transaction because the customer is a U.S. governmental organization that is exempt from sales tax. 4. To obtain funds for purchasing new equipment, OPC issued bonds on 1/30 with a total face value of $97,000, stated Interest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $87,753 from the bond issuance, which implies a market interest rate of 7 percent, . On 131, 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 131, 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. . Accrue OPC's corporate income taxes on 131, estimated to be $4,290. Required information NO Date Debit Credit 1 January 01 General Journal Salaries and Wages Payable Cash 1,600 1,600 2 January 02 11,000 Vehicles Cash 11,000 3 January 03 FICA Payable Withheld Income Taxes Payable Cash 600 500 1,100 4 January 04 Dividends Dividends Payable 985 5 January 05 Allowance for Doubtful Accounts Accounts Receivable 985 27,825 6 January 06 Accounts Receivable Sales Tax Payable Sales Revenue 1,575 26.250 7 January 06 Cost of Goods Sold 2 Next > 8 January 07 Sales Tax Payable 500 Cash 500 9 January 08 2,400 Cash Treasury Stock 2,400 10 January 09 Cash Accounts Receivable 11 January 10 Dividends Payable Cash 12 January 11 Inventory Accounts Payable 13 January 15 Depreciation Expense Accumulated Depreciation-Equipment 14 January 15 Cash Accumulated Depreciation-Equipment Gain on Disposal of PPE Equipment 15 January 16 Salaries and Wages Expense Payroll Tax Expense FICA Payable Withheld Income Taxes Payable Unemployment Tax Payable Cash 16 January 17 Notes Payable (long-term) Interest Payable Interest Expense Cash 17 January 27 Accounts Receivable Sales Tax Payable Sales Revenue 18 January 27 Cost of Goods Sold Inventory 19 January 29 Deferred Revenue Sales Revenue Required information 20 January 29 Cost of Goods Sold Inventory 21 January 30 Cash Discount on Bonds Payable Bonds Payable 22 January 31 Depreciation Expense Accumulated Depreciation Vehicles 23 January 31 Bad Debt Expense Allowance for Doubtful Accounts 24 January 31 Rent Expense Prepaid Rent 25 January 31 Salaries and Wages Expense Payroll Tax Expense Withheid Income Taxes Payable FICA Payable Unemployment Tax Payable Salaries and Wages Payable Prepaid Rent 25 January 31 Salaries and Wages Expense Payroll Tax Expense Withheld Income Taxes Payable FICA Payable Unemployment Tax Payable Salaries and Wages Payable 26 January 31 Income Tax Expense Income Tax Payable