[The following information applies to the questions displayed below.) One Product Corporation (OPC) incorporated at the...

Transcribed Image Text:

[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 Doubtful Accounts Inventory Prepaid Rent Equipment Accumulated Depreciation. 20,080 8,240 955 12,600 1,740 33,400 3,240 Accounts Payable Sales Tax Payable FICA Payable Salaries and Wages Payable Withheld Income Taxes Payable Unemployment Tax Payable Deferred Revenue Interest Payable Notes Payable (long-term) Common Stock Additional Paid-In Capital, Connon Retained Earnings Treasury Stock 0 500 600 500 1,600 300 4,500 511 22,700 15,200 19,544 9,910 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 $12,600. OPC's policy is to use the FIFO method, recorded using a perpetual inventory system. The $1,740 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 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 $12,600. OPC's policy is to use the FIFO method, recorded using a perpetual inventory system. The $1,740 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 $11,000 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. A COUE tamer secunt in written off se uncallectible an inc 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 $985 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. 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. 1. Collections from customers on account, totaling $14,886, 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 $4,480. 1. The equipment purchased last year for $33,400 is sold on 1/15 for $32,800 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 $23,304, which includes interest accrued in December and an additional $93 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 $97,000, stated Interest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $87,753 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. 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 $4,290. 8. Rather than distribute a cash dividend in January (see item j), OPC considered issuing a 30 percent stock dividend on common stock. What journal entry would OPC record had a 30 percent stock dividend been issued? 9. What journal entry would OPC record had a 10 percent stock dividend been issued? Complete this question by entering your answers in the tabs below. Required 8 Required 9 What journal entry would OPC record had a 10 percent stock dividend been issued? (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 < 1 Record the issuance of 10 percent stock dividend. Required information Journal entry worksheet < Record the issuance of 10 percent stock dividend. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit View general journal Record entry Clear entry [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 Doubtful Accounts Inventory Prepaid Rent Equipment Accumulated Depreciation. 20,080 8,240 955 12,600 1,740 33,400 3,240 Accounts Payable Sales Tax Payable FICA Payable Salaries and Wages Payable Withheld Income Taxes Payable Unemployment Tax Payable Deferred Revenue Interest Payable Notes Payable (long-term) Common Stock Additional Paid-In Capital, Connon Retained Earnings Treasury Stock 0 500 600 500 1,600 300 4,500 511 22,700 15,200 19,544 9,910 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 $12,600. OPC's policy is to use the FIFO method, recorded using a perpetual inventory system. The $1,740 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 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 $12,600. OPC's policy is to use the FIFO method, recorded using a perpetual inventory system. The $1,740 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 $11,000 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. A COUE tamer secunt in written off se uncallectible an inc 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 $985 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. 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. 1. Collections from customers on account, totaling $14,886, 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 $4,480. 1. The equipment purchased last year for $33,400 is sold on 1/15 for $32,800 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 $23,304, which includes interest accrued in December and an additional $93 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 $97,000, stated Interest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $87,753 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. 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 $4,290. 8. Rather than distribute a cash dividend in January (see item j), OPC considered issuing a 30 percent stock dividend on common stock. What journal entry would OPC record had a 30 percent stock dividend been issued? 9. What journal entry would OPC record had a 10 percent stock dividend been issued? Complete this question by entering your answers in the tabs below. Required 8 Required 9 What journal entry would OPC record had a 10 percent stock dividend been issued? (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 < 1 Record the issuance of 10 percent stock dividend. Required information Journal entry worksheet < Record the issuance of 10 percent stock dividend. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit View general journal Record entry Clear entry