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Required information One Product Corp. (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 Doubtful Accounts Inventory Prepaid Rent Equipment Accumulated Depreciation Accounts Payable Sales Tax Payable FICA Payable Withheld Income Taxes Payable Salaries and Wages Payable Unemployment Tax Payable Deferred Revenue Interest Payable Note Payable (long-term) Common Stock Additional Paid-In Capital, Common Retained Earnings Treasury Stock $19,530 8,260 905 12,340 1,640 27,400 2,640 0 500 600 500 1,600 300 4,500 500 22,200 13,700 19,305 5,920 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%. OPC's January 1 inventory balance consists of 180 units at a total cost of $12.340. OPC's policy is to use the FIFO method, recorded using a perpetual inventory system. The $1,640 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 $8.500 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 103. 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 $960 customer account is written off as uncollectible on 1/05. On 106, 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 107. h. On 108, OPC issued 300 shares of treasury stock for $2,400. i. Collections from customers on account, totaling $10,305, are recorded on 109. j. 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 $4,270. 1. The equipment purchased last year for $27,400 is sold on 1/15 for $25,800 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 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 $22,791, which includes interest accrued in December and an additional $91 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 130 with a total face value of $92,000, stated interest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $83,230 from the bond issuance, which implies a market interest rate of 7 percent 1. 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 131, using the allowance method. 2 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. v. Accrue OPC's corporate income taxes on 1/31, estimated to be $4,070. General Ledger Account Cash Accounts Receivable Debit Credit No. Date Debit Credit No. Date Balance 19,530 Balance 8,260 Dec 31 Dec 31 Inventory Debit No. Allowance for Doubtful Accounts Date Debit Credit Dec 31 No. Credit Balance 905 Date Dec 31 Balance 12,340 Prepaid Rent Equipment Debit No. Date Debit Credit No. Date Credit Balance 1,640 Balance 27,400 Dec 31 Dec 31 Interest Payable Debit Credit No. Accumulated Depreciation-Equipment Date Debit Credit Dec 31 No. Balance Balance 2,640 Date Dec 31 500 Salaries and Wages Payable Debit Credit No. No. Date Dec 31 Balance 1,600 Withheld Income Taxes Payable Date Debit Credit Dec 31 Balance 500 FICA Payable Debit Credit Unemployment Tax Payable Debit Credit No. Date No. Balance 600 Date Dec 31 Balance 300 Dec 31 Deferred Revenue Sales Tax Payable Debit Credit No. Date No. Date Debit Credit Balance 500 Balance 4,500 Dec 31 Dec 31 Common Stock Notes Payable (long-term) Debit Credit No. No. Date Debit Date Dec 31 Balance 22,200 Credit Balance 13,700 Dec 31 No. Additional Paid-In Capital, Common Stock Date Debit Credit Balance 19,305 Retained Earnings Debit Credit No. Date Balance 5,920 Dec 31 Treasury Stock Debit Credit No. Date Balance 4,000 Dec 31 Unadjusted ONE PRODUCT CORP. Trial Balance January 30, 2021 Account Title Debit Credit Cash $ 19,530 8,260 Accounts Receivable Allowance for Doubtful Accounts 905 12,340 1,640 27,400 2,640 500 1,600 500 600 Inventory Prepaid Rent Equipment Accumulated Depreciation Equipment Interest Payable Salaries and Wages Payable Withheld Income Taxes Payable FICA Payable Unemployment Tax Payable Sales Tax Payable Deferred Revenue Notes Payable (long-term) Common Stock Additional Paid-In Capital, Common Stock Retained Earnings Treasury Stock Total 300 500 4,500 22,200 13,700 19,305 5,920 4,000 73,170 $ $ 73,170 Unadjusted ONE PRODUCT CORP. Income Statement For the Month Ended January 31 $ 0 $ 0 $ 0 0 0 0 o 0 Loss(Gain) on Disposal Income from Operations $ 0 0 Income before Income Tax Expense 0 0 $ 0 ONE PRODUCT CORP. Statement of Stockholders' Equity For the Month Ended January 31 Additional Paid- Common Stock In Capital, Common Retained Earinings Treasury Stock Beginning $ 5,920 Stock Issuances Net Income 0 Dividends (3,175) 2,745 Ending $ Unadjusted ONE PRODUCT CORP. Balance Sheet At January 31 $ 0000 0 0 0 $ 0 0 0 0 0 0 0 0 0 0 0 0 $ 0 0 0 2,745 0 $ 2,745 2,745 $ 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? 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 Jan. 8? Required information One Product Corp. (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 Doubtful Accounts Inventory Prepaid Rent Equipment Accumulated Depreciation Accounts Payable Sales Tax Payable FICA Payable Withheld Income Taxes Payable Salaries and Wages Payable Unemployment Tax Payable Deferred Revenue Interest Payable Note Payable (long-term) Common Stock Additional Paid-In Capital, Common Retained Earnings Treasury Stock $19,530 8,260 905 12,340 1,640 27,400 2,640 0 500 600 500 1,600 300 4,500 500 22,200 13,700 19,305 5,920 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%. OPC's January 1 inventory balance consists of 180 units at a total cost of $12.340. OPC's policy is to use the FIFO method, recorded using a perpetual inventory system. The $1,640 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 $8.500 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 103. 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 $960 customer account is written off as uncollectible on 1/05. On 106, 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 107. h. On 108, OPC issued 300 shares of treasury stock for $2,400. i. Collections from customers on account, totaling $10,305, are recorded on 109. j. 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 $4,270. 1. The equipment purchased last year for $27,400 is sold on 1/15 for $25,800 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 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 $22,791, which includes interest accrued in December and an additional $91 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 130 with a total face value of $92,000, stated interest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $83,230 from the bond issuance, which implies a market interest rate of 7 percent 1. 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 131, using the allowance method. 2 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. v. Accrue OPC's corporate income taxes on 1/31, estimated to be $4,070. General Ledger Account Cash Accounts Receivable Debit Credit No. Date Debit Credit No. Date Balance 19,530 Balance 8,260 Dec 31 Dec 31 Inventory Debit No. Allowance for Doubtful Accounts Date Debit Credit Dec 31 No. Credit Balance 905 Date Dec 31 Balance 12,340 Prepaid Rent Equipment Debit No. Date Debit Credit No. Date Credit Balance 1,640 Balance 27,400 Dec 31 Dec 31 Interest Payable Debit Credit No. Accumulated Depreciation-Equipment Date Debit Credit Dec 31 No. Balance Balance 2,640 Date Dec 31 500 Salaries and Wages Payable Debit Credit No. No. Date Dec 31 Balance 1,600 Withheld Income Taxes Payable Date Debit Credit Dec 31 Balance 500 FICA Payable Debit Credit Unemployment Tax Payable Debit Credit No. Date No. Balance 600 Date Dec 31 Balance 300 Dec 31 Deferred Revenue Sales Tax Payable Debit Credit No. Date No. Date Debit Credit Balance 500 Balance 4,500 Dec 31 Dec 31 Common Stock Notes Payable (long-term) Debit Credit No. No. Date Debit Date Dec 31 Balance 22,200 Credit Balance 13,700 Dec 31 No. Additional Paid-In Capital, Common Stock Date Debit Credit Balance 19,305 Retained Earnings Debit Credit No. Date Balance 5,920 Dec 31 Treasury Stock Debit Credit No. Date Balance 4,000 Dec 31 Unadjusted ONE PRODUCT CORP. Trial Balance January 30, 2021 Account Title Debit Credit Cash $ 19,530 8,260 Accounts Receivable Allowance for Doubtful Accounts 905 12,340 1,640 27,400 2,640 500 1,600 500 600 Inventory Prepaid Rent Equipment Accumulated Depreciation Equipment Interest Payable Salaries and Wages Payable Withheld Income Taxes Payable FICA Payable Unemployment Tax Payable Sales Tax Payable Deferred Revenue Notes Payable (long-term) Common Stock Additional Paid-In Capital, Common Stock Retained Earnings Treasury Stock Total 300 500 4,500 22,200 13,700 19,305 5,920 4,000 73,170 $ $ 73,170 Unadjusted ONE PRODUCT CORP. Income Statement For the Month Ended January 31 $ 0 $ 0 $ 0 0 0 0 o 0 Loss(Gain) on Disposal Income from Operations $ 0 0 Income before Income Tax Expense 0 0 $ 0 ONE PRODUCT CORP. Statement of Stockholders' Equity For the Month Ended January 31 Additional Paid- Common Stock In Capital, Common Retained Earinings Treasury Stock Beginning $ 5,920 Stock Issuances Net Income 0 Dividends (3,175) 2,745 Ending $ Unadjusted ONE PRODUCT CORP. Balance Sheet At January 31 $ 0000 0 0 0 $ 0 0 0 0 0 0 0 0 0 0 0 0 $ 0 0 0 2,745 0 $ 2,745 2,745 $ 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? 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 Jan. 8