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 20,150 Accounts Receivable 8,220 Allowance for Doubtful Accounts 925 Inventory 12,060 Prepaid Rent 1,680 Equipment 29,800 Accumulated Depreciation 2,880 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 504 Notes Payable (long-term) 22,480 Common Stock 14,300 Additional Paid-In Capital, Common 19,401 Retained Earnings 7,500 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 percent OPC's January 1 Inventory balance consists of 180 units at a total cost of $12,060 OPC's policy is to use the FIFO method, recorded using a perpetual Inventory system The $1.680 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 anses 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 D. A truck is purchased on 1/02 for $9,500 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 $970 customer account is written off as uncollectible on 1/05 y 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 n. On 1/08, OPC issued 300 shares of treasury stock for $2,400. Collections from customers on account, totaling $12,127, are recorded on 1/09. > 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 $4,270 | The equipment purchased last year for $29,800 is sold on 1/15 for $28,600 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 $22,996, which includes interest accrued in December and an additional $92 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 US 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 $94,000, stated interest rate of 5 percent, annual compounding, and six-year maturity date OPC received $85,039 from the bond issuance, which implies a market interest rate of 7 percent 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 1 On 131, adjust for January rent explred u Accrue January 31 payroli on 131, 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 1/31 estimated to be $4.240 Trial Balance January 31, 2021 1 Credit 5 Debit 107 695 27.718 554 1,220 9.500 . 380 4270 1.600 500 600 400 Account Title Cash Accounts Receivable Allowance for Doubtful Accounts Inventory Vehicles Accumulated Depreciation Vehicles Accounts Payable Salaries and Wages Payable withheld Income Taxes Payable FICA Payable Unemployment Tax Payable Sales Tax Payable Income Tax Payable Deferred Revenue Bonds Payable Discount on Bonds Payable Common Stock Additional Paid-in Capital, Common Stock Retained Earings Treasury Stock Gain on Disposal of PPE Sales Revenue Cost of Goods Sold Bad Debt Expense Depreciation Expense interest Expense Payroll Tax Expense Rent Expense Salaries and Wages Expense Income Tax Expense Dividends Total 1,845 4 240 750 94 000 8.961 14.300 19,401 7,500 1,600 1.920 34.500 D 15.110 599 620 92 400 1,680 4.000 4.240 3.325 186,760 5 t 2 $ 186,760 The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection. You will need to determine and enter the beginning and ending balances. Unadjusted ONE PRODUCT CORPORATION Statement of Stockholders' Equity For the Month Ended January 31 Additional Paid- Common Stock In Capital Common Retained Earinings Treasury Stock S 7.500 Beginning Stock Issuances Net Income Dividends 16 858 (3,325) 21.033 $ Ending The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection. You will need to determine and enter the beginning and ending balances. Adjusted ONE PRODUCT CORPORATION Statement of Stockholders' Equity For the Month Ended January 31 Additional Common Paid in Stock Capital Common Retained Earinings Treasury Stock 7,500 Beginning Stock Issuances Net Income Dividends Ending 8,358 (3,325) 12.533 Using the information from the requirements above, complete the 'Analysis' tab. 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? Increase 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 January 8? None 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 20,150 Accounts Receivable 8,220 Allowance for Doubtful Accounts 925 Inventory 12,060 Prepaid Rent 1,680 Equipment 29,800 Accumulated Depreciation 2,880 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 504 Notes Payable (long-term) 22,480 Common Stock 14,300 Additional Paid-In Capital, Common 19,401 Retained Earnings 7,500 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 percent OPC's January 1 Inventory balance consists of 180 units at a total cost of $12,060 OPC's policy is to use the FIFO method, recorded using a perpetual Inventory system The $1.680 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 anses 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 D. A truck is purchased on 1/02 for $9,500 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 $970 customer account is written off as uncollectible on 1/05 y 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 n. On 1/08, OPC issued 300 shares of treasury stock for $2,400. Collections from customers on account, totaling $12,127, are recorded on 1/09. > 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 $4,270 | The equipment purchased last year for $29,800 is sold on 1/15 for $28,600 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 $22,996, which includes interest accrued in December and an additional $92 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 US 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 $94,000, stated interest rate of 5 percent, annual compounding, and six-year maturity date OPC received $85,039 from the bond issuance, which implies a market interest rate of 7 percent 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 1 On 131, adjust for January rent explred u Accrue January 31 payroli on 131, 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 1/31 estimated to be $4.240 Trial Balance January 31, 2021 1 Credit 5 Debit 107 695 27.718 554 1,220 9.500 . 380 4270 1.600 500 600 400 Account Title Cash Accounts Receivable Allowance for Doubtful Accounts Inventory Vehicles Accumulated Depreciation Vehicles Accounts Payable Salaries and Wages Payable withheld Income Taxes Payable FICA Payable Unemployment Tax Payable Sales Tax Payable Income Tax Payable Deferred Revenue Bonds Payable Discount on Bonds Payable Common Stock Additional Paid-in Capital, Common Stock Retained Earings Treasury Stock Gain on Disposal of PPE Sales Revenue Cost of Goods Sold Bad Debt Expense Depreciation Expense interest Expense Payroll Tax Expense Rent Expense Salaries and Wages Expense Income Tax Expense Dividends Total 1,845 4 240 750 94 000 8.961 14.300 19,401 7,500 1,600 1.920 34.500 D 15.110 599 620 92 400 1,680 4.000 4.240 3.325 186,760 5 t 2 $ 186,760 The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection. You will need to determine and enter the beginning and ending balances. Unadjusted ONE PRODUCT CORPORATION Statement of Stockholders' Equity For the Month Ended January 31 Additional Paid- Common Stock In Capital Common Retained Earinings Treasury Stock S 7.500 Beginning Stock Issuances Net Income Dividends 16 858 (3,325) 21.033 $ Ending The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection. You will need to determine and enter the beginning and ending balances. Adjusted ONE PRODUCT CORPORATION Statement of Stockholders' Equity For the Month Ended January 31 Additional Common Paid in Stock Capital Common Retained Earinings Treasury Stock 7,500 Beginning Stock Issuances Net Income Dividends Ending 8,358 (3,325) 12.533 Using the information from the requirements above, complete the 'Analysis' tab. 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? Increase 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 January 8? None