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( SEE IMAGES FOR FULL INFORMATION ) General Journal tab - Prepare all January journal entries and adjusting entries for items ( a ) to
SEE IMAGES FOR FULL INFORMATION General Journal tab Prepare all January journal entries and adjusting entries for items a to s Review the 'General
Ledger' and the adjusted 'Trial Balance' Tabs to see the effect of the transactions on the account balances.
Trial Balance tab Review the adjusted 'Trial Balance' as of January
Income Statement tab Prepare an income statement for the period ended J One Trick Pony OTP incorporated and began operations near the end of the year, resulting in the following postclosing balances at January Transactions
a Included in OTP's January Accounts Receivable balance is a $ balance due from Jeff Letrotski. Jeff is having cash flow
problems and cannot pay the $ balance at this time. On OTP arranges with Jeff to convert the $ balance to a six
month note, at annual interest. Jeff signs the promissory note, which indicates the principal and all interest will be due and
payable to OTP on July of this year.
b OTP paid a $ insurance premium on covering the month of January; the payment is recorded directly as an expense.
c OTP purchased an additional units of inventory from a supplier on account on at a total cost of $ with terms
d OTP paid a courier $ cash on for sameday delivery of the units of inventory.
e The units that OTP's customer paid for in advance in December are delivered to the customer on
f On OTP received a purchase allowance of $ on account, and then paid the amount necessary to settle the balance
owed to the supplier for the purchase of inventory in c
g Sales of units of inventory occurring during the period of are recorded on The sales terms are
h Collected payments on from sales to customers recorded on
i OTP paid the first weeks' wages to the employees on The total paid is $
j Wrote off a $ customer's account balance on OTP uses the allowance method, not the direct writeoff method.
k Paid $ on 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.
OTP recovered $ cash on from the customer whose account had previously been written off on
m An unrecorded $ utility bill for January arrived on It is due on and will be paid then.
n Sales of units of inventory during the period of with terms are recorded on
o Of the sales recorded on units are returned to OTP on The inventory is not damaged and can be resold. OTP
charges sales returns to a contrarevenue account.
p On OTP records the $ employee salary that is owed but will be paid February
q OTP uses the aging method to estimate and adjust for uncollectible accounts on All of OTP's accounts receivable fall into a
single aging category, for which is estimated to be uncollectible. Update the balances of both relevant accounts prior to
determining the appropriate adjustment.
r Accrue interest for January on the notes payable on
s Accrue interest for January on Jeff Letrotski's note on see a
December :
The following information is relevant to the first month of operations in the following year:
OTP will sell inventory at $ per unit. OTP's January inventory balance consists of units at a total cost of $ OTP's policy
is to use the FIFO method, recorded using a perpetual inventory system.
In December, OTP received a $ payment for units OTP is to deliver in January; this obligation was recorded in Deferred
Revenue. Rent of $ was unpaid and recorded in Accounts Payable at December For the month ended January
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