[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 $ 19,500 Accounts Receivable 8,250 Allowance for Doubtful Accounts 885 Inventory 12,060 Prepaid Rent 1,600 Equipment 25,000 Accumulated Depreciation 2,400 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 495 Notes Payable (long-term) 22,000 Common Stock 13,300 Additional Paid-In Capital, Common 19, 210 Retained Earnings 4,120 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 $1,600 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 1/02 for $10,000 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 104, to be paid on 1/10. e. A $950 customer account is written off as uncollectible on 105. 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. 9. Sales taxes of $500 that had been collected and recorded in December are paid to the state on 1/07. n. On 108, OPC issued 300 shares of treasury stock for $2,400. Collections from customers on account, totaling $8,500, are recorded on 109. 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 1/11 for $4,410. 1. The equipment purchased last year for $25,000 is sold on 1/15 for $23,000 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 $22,585, which includes interest accrued in December and an additional $90 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 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 $90,000, stated interest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $81,420 from the bond issuance, which implies a market interest rate of 7 percent. 1. On 1/31, OPC records units-of-production depreciation on the vehicle (truck), which was driven 1,900 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. Accrue OPC's corporate income taxes on 131, estimated to be $3,750. General General Income Statement of Requirement Journal Trial Balance Ledger Statement Stockholders Balance Sheet Analysis Equity Prepare all January journal entries and adjusting entries for items (a)-(v). Review the 'General Ledger' and the adjus Balance' Tabs to see the effect of the transactions on the account balances. (Round your answer to the nearest dollar entry is required for a transaction/event, select "No journal entry required" in the first account field.) Credit No 1 Date January 01 General Journal Salaries and Wages Payable Cash Debit 1,600 1,600 2 January 02 10,000 Vehicles Cash 10,000 3 January 03 600 FICA Payable Withheld Income Taxes Payable Cash >> 500 1,100 4 January 04 8,128 Dividends Dividends Payable 8,128 5 January 05 950 Allowance for Doubtful Accounts Accounts Receivable 950 6 January 06 27,825 Accounts Receivable Sales Tax Payable Sales Revenue 26,250 1,575 7 January 06 500 Cost of Goods Sold Inventory 500 8 January 07 500 Sales Tax Payable Cash 500 9 > January 08 2,400 Cash Treasury Stock 2,400 10 January 09 8,500 Cash Accounts Receivable >> 8,500 11 January 10 > 8,128 Dividends Payable Cash 8,128 12 January 11 4,480 Inventory Accounts Payable 4,480 13 January 15 192 Accumulated Depreciation-Equipment Depreciation Expense 192 14 January 15 23,000 Cash Accumulated Depreciation Equipment Equipment Sales Revenue 000 25,000 15 January 16 2,000 x Salaries and Wages Expense Cash FICA Payable Withheld Income Taxes Payable Unemployment Tax Payable 1,550 150 250 . 50 16 January 17 22,585 Notes Payable (short-term) Interest Payable Interest Expense 508 90 DO neh 22102 16 January 17 22,585 508 Notes Payable (short-term) Interest Payable Interest Expense Cash 90 23,183 17 January 27 4,770 Accounts Receivable Sales Tax Payable Sales Tax Payable 4,500 270 18 January 27 4,500 Cost of Goods Sold Inventory 4,500 19 January 29 3,750 Deferred Revenue Sales Revenue 3,750 20 January 29 3,750 Accounts Receivable Sales Revenue 3,750 21 January 30 Cash Discount on Bonds Payable Bonds Payable 81,420 8,580 90,000 22 January 31 380 Depreciation Expense Accumulated Depreciation-Vehicles 380 23 January 31 165 Bad Debt Expense Allowance for Doubtful Accounts 165 24 January 31 1,600 Rent Expense Prepaid Rent 1,600 Prepaid Rent 1,600 25 January 31 2,000 1,550 Salaries and Wages Expense Cash Withheld Income Taxes Payable FICA Payable Unemployment Tax Payable 250 OO 150 50 26 January 31 3,750 Income Tax Expense Income Tax Payable 3,750 Adjusted ONE PRODUCT CORPORATION Income Statement For the Month Ended January 31 Revenues Sales Revenue 9,075 0 $ 9,075 5,000 1 tt 188 4,000 1,600 Gross Profit Expenses Cost of Goods Sold Depreciation Expense Salaries and Wages Expense Rent Expense Bad Debt Expense Loss (Gain) on Disposal Income from Operations Interest Expense Income before Income Tax Expense Income Tax Expense Net loss 165 6,540 (8,418) 90 (8,508) 3,750 $ (12,258) ONE PRODUCT CORPORATION Balance Sheet At January 31 0 O OO 0 0 OOO 0 $ O 0 olo 0 0 0 0 x 0 0 0 0 0 0 (11,213) 0 $ (11,213) $ (11,213) ONE PRODUCT CORPORATION Statement of Stockholders' Equity For the Month Ended January 31 Additional Common Paid-In Stock Capital, Common $ 13,300 $ 19,210 Retained Earinings Treasury Stock $ 4,120 $ (4,000) Beginning Stock Issuances Net Income Dividends Ending (12,258) (3,075) $ (11,213) Prepaid Rent 1,600 25 January 31 2,000 Salaries and Wages Expense Cash Withheld Income Taxes Payable FICA Payable Unemployment Tax Payable 1,550 250 lololo 150 50 26 January 31 3,750 Income Tax Expense Income Tax Payable 3,750