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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![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:
22,000
8,300
1,055
12,240
1,940
45,400
4,440
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
Notes Payable (long-term)
500
600
500
1,600
300
4,500
533
23,700
18, 200
20,022
17,930
4,000
Common Stock
Additional Paid-In Capital, Common
Retained Earnings
Treasury Stock
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 $12.240. OPC's policy is to use the FIFO method, recorded using a perpetual inventory
system.
• 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 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 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 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 $1,035 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 to
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.
i Collections from customers on account, totaling $18.021. are recorded on 1/09.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4959d4f7-c515-4b84-8a14-00389cef5562%2F47c3800a-d043-4ac2-a174-a816211d11f0%2F9ba9hfh_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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:
22,000
8,300
1,055
12,240
1,940
45,400
4,440
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
Notes Payable (long-term)
500
600
500
1,600
300
4,500
533
23,700
18, 200
20,022
17,930
4,000
Common Stock
Additional Paid-In Capital, Common
Retained Earnings
Treasury Stock
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 $12.240. OPC's policy is to use the FIFO method, recorded using a perpetual inventory
system.
• 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 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 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 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 $1,035 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 to
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.
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 per
share.
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 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 $24,330, which includes
interest 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 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 $107,000, stated
interest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $96,800 from the bond
issuance, 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 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.
V. Accrue OPC's corporate income taxes on 1/31, estimated to be $5,740.
General
Journal
Statement of
Stockholders Balance Sheet
Equity
General
Income
Requirement
Trial Balance
Analysis
Ledger
Statement
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
3
4
7
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
General Journal
Debit
Credit
January 01
ment](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4959d4f7-c515-4b84-8a14-00389cef5562%2F47c3800a-d043-4ac2-a174-a816211d11f0%2Fa26s77h_processed.jpeg&w=3840&q=75)
Transcribed Image Text:j. On 1/10, 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 $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 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 $24,330, which includes
interest 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 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 $107,000, stated
interest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $96,800 from the bond
issuance, 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 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.
V. Accrue OPC's corporate income taxes on 1/31, estimated to be $5,740.
General
Journal
Statement of
Stockholders Balance Sheet
Equity
General
Income
Requirement
Trial Balance
Analysis
Ledger
Statement
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
3
4
7
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
General Journal
Debit
Credit
January 01
ment
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