[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 Accounts Receivable Allowance for Doubt ful Accounts Inventory Prepaid Rent Equipment 21,400 8,270 1,005 12,060 1,840 39,400 Accumulated Depreciation 3,840 Accounts Payable 8 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 522 Notes Payable (long-term) 23,200 Common Stock 16,700 Additional Paid-In Capital, Common 19,783 Retained Earnings 13,920 Treasury Stock 4,000 of 2 013617 Book rences 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 $1,840 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 on 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 ore 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. 11of2 013554 ferences January Transactions a. On 1/01, OPC paid employees' salaries and wages that were previously accrued on December 31 b. A truck is purchased on 1/02 for $13,500 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 $1,010 customer account is written off as uncollectible on 1/05 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. Soles taxes of $500 that had been collected and recorded in December are paid to the state on 1/07 h On 1/08, OPC issued 300 shares of treasury stock for $2,400 Collections from customers on account, totaling $17,771, are recorded on 1/09 On 1110, OPC distributes the $0.50 cash dividend declared on January 4. The company's stock price is currently $5 per share OPC purchases on account and receives 70 units of inventory on 1/11 for $4,270. The equipment purchased last year for $39,400 is sold on 1/15 for $39,800 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 occrue 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 $23,817, which includes Interest accrued in December and an additional $95 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 $102,000, stated interest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $92,276 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. OPC estimates that 2% of the ending eccounts receivable balance will be uncollectible. Adjust the applicable accounts n. Having sold the equipment, OPC pays off the note payable in full on 1/17. The amount paid is $23,817, which includes interest accrued in December and an additional $95 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 $102,000, stated Interest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $92,276 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 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 v. Accrue OPC's corporate income taxes on 1/31, estimated to be $4,930 Requirement Statement of General Journal General Ledger Trial Balance Income Statement Stockholders Balance Sheet Analysis Equity Prepare all January journal entries and adjusting entries for items (a)-(v). Review the 'General Ledger' and the adjusted Trial Balance' Tabs to see the effect of the transactions on the account balances. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2 5 6 8 26 On 1/01, OPC paid employees' salaries and wages that were previously accrued on December 31. Record the transaction. Note: Enter debits before credits. Date January 01 General Journal Debit Credit