One Product Corporation (OPC) incorporated at the beginning of last year. The balances on its post-closing trial balanceprepared on December 31, at the end of its first year of operations, were:22,0008,3001,05512,2401,94045,4004,440CashAccounts ReceivableAllowance for Doubtful AccountsInventoryPrepaid RentEquipmentAccumulated DepreciationAccounts PayableSales Tax PayableFICA PayableWithheld Income Taxes PayableSalaries and Wages PayableUnemployment Tax PayableDeferred RevenueInterest PayableNotes Payable (long-term)5006005001,6003004,50053323,70018, 20020,02217,9304,000Common StockAdditional Paid-In Capital, CommonRetained EarningsTreasury StockThe 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 of180 units at a total cost of $12.240. OPC's policy is to use the FIFO method, recorded using a perpetual inventorysystem.• The $1,940 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 fiveyears. 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 thefirst day of the following month for the second half of each month. Withholdings each pay period include $250 ofincome taxes and $150 of FICA taxes. These withholdings and the employer's matching contribution are paidmonthly on the second day of the following month. In addition, unemployment taxes of $50 are accrued each payperiod, 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 of25 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 Transactionsa. 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 $10,000 cash. It is estimated this vehicle will be used for 50,000 miles, after which itwill 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 $1,035 customer account is written off as uncollectible on 1/05.f On 1/06, recorded sales of 175 units of inventory on account. Sales tax is charged but not yet collected or remitted tothe state.g. Sales 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.i Collections from customers on account, totaling $18.021. are recorded on 1/09. j. On 1/10, OPC distributes the $0.50 cash dividend declared on January 4. The company's stock price is currently $5 pershare.k. OPC purchases on account and receives 70 units of inventory on 1/11 for $3,920.I The equipment purchased last year for $45,400 is sold on 1/15 for $46,800 cash. Record depreciation for the first half ofJanuary 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'smatching share of FICA taxes.n. Having sold the equipment, OPC pays off the note payable in full on 1/17. The amount paid is $24,330, which includesinterest accrued in December and an additional $97 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 thistransaction 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 $107,000, statedinterest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $96,800 from the bondissuance, which implies a market interest rate of 7 percent.r. 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 accountson 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 theemployer's matching share of FICA taxes.V. Accrue OPC's corporate income taxes on 1/31, estimated to be $5,740.GeneralJournalStatement ofStockholders Balance SheetEquityGeneralIncomeRequirementTrial BalanceAnalysisLedgerStatementPrepare 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 journalentry required" in the first account field.)View transaction listJournal entry worksheet23478 .....26<>On 1/01, OPC paid employees' salaries and wages that were previouslyaccrued on December 31. Record the transaction.Note: Enter debits before credits.DateGeneral JournalDebitCreditJanuary 01ment

Journal Entry It is important to enter the required journal entries into the debit and credit of…

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 $10,000 cash. It is estimated this vehicle will be used for 50,000 miles, after whic 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 $1,035 customer account is written off as uncollectible on 1/05. f On 1/06, recorded sales of 175 units of inventory on account. Sales tax is charged but not yet collected or remitted the state. g. Sales 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.

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 $10,000 cash. It is estimated this vehicle will be used for 50,000 miles, after whic 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 $1,035 customer account is written off as uncollectible on 1/05. f On 1/06, recorded sales of 175 units of inventory on account. Sales tax is charged but not yet collected or remitted the state. g. Sales 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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