C11–2 (continued)
Req. 2 (continued)
Dividends Payable (L)
Bonds Payable (L)
Discount on
Bonds Payable (xL)
Dividends (SE)
0 Beg.
Beg. 0
Beg. 0
10. 3,075
3,075 4.
17. 8,580
4. 3,075
0 Bal.
90,000 Bal.
Bal. 8,580
Bal. 3,075
Common Stock (SE)
APIC-Common (SE)
Retained Earnings (SE)
Treasury Stock (SE)
19,210 Beg.
4,120 Beg.
Beg. 4,000
2,400 8.
19,210 Bal.
4,120 Bal.
Bal. 1,600
Sales Revenue (R)
Cost of Goods Sold (E)
Depn. Expense (E)
Salaries and Wages
Expense (E)
0 Beg.
26,250 6.
Beg. 0
6. 11,725
Beg. 0
12. 200
Beg. 0
13. 2,000
4,500 15.
3,750 16.
15. 1,910
16. 1,575
18. 380
21. 2,000
34,500 Bal.
Bal. 15,210
Bal. 580
Bal. 4,000
Payroll Tax Expense (E)
Rent Expense (E)
Interest Expense (E)
Income Tax Expense (E)
Beg. 0
13. 200
Beg. 0
20. 1,600
Beg. 0
14. 90
Beg. 0
22. 3,750
21. 200
Bal. 400
Bal. 1,600
Bal. 90
Bal. 3,750
Bad Debt Expense (E)
Gain on Disposal (R)
Beg. 0
0 Beg.
19. 693
600 12.
Bal. 693
600 Bal.
C11–2 (continued)
Req. 2 (continued) ONE PRODUCT CORP.
Adjusted Trial Balance
January 31
Account Titles
Debit
Credit
Cash
$ 94,360
Accounts Receivable
31,395
Allowance for Doubtful Accounts
$ 628
Inventory
1,260
Prepaid Rent
0
Equipment
0
Vehicles
10,000
Accumulated Depreciation—Equipment
0
Accumulated Depreciation—Vehicles
380
Accounts Payable
4,410
Sales Tax Payable
1,845
FICA Payable
600
Withheld Income Taxes Payable
500
Unemployment Taxes Payable
400
Salaries and Wages Payable
1,600
Unearned Revenue
750
Note Payable
0
Interest Payable
0
Income Taxes Payable
3,750
Dividends Payable
0
Bonds Payable
90,000
Discount on Bonds Payable
8,580
Common Stock
13,300
Additional Paid-In Capital, Common
19,210
Treasury Stock
1,600
Retained Earnings
4,120
Dividends
3,075
Sales Revenue
34,500
Cost of Goods Sold
15,210
Salaries and Wages Expense
4,000
Rent Expense
1,600
Bad Debt Expense
693
Depreciation Expense
580
Payroll Tax Expense
400
Interest Expense
90
Income Tax Expense
3,750
Gain on Disposal
600
Totals
$ 176,593
$ 176,593
C11–2 (continued)
Req. 3
ONE PRODUCT CORP.
Income Statement
For the Month Ended January 31
Sales Revenue …………………………..…………………………... $34,500
Income before Income Tax Expense ………………………….. 12,527
Income Tax Expense…………………………..…………………… 3,750
Net Income ……………………………………………………….……. $ 8,777
ONE PRODUCT CORP.
Statement of Stockholders’ Equity
C11–2 (continued)
Req. 3 (continued)
ONE PRODUCT CORP.
Balance Sheet
At January 31
Assets
Current Assets:
Cash
Accounts Receivable
Allowance for Doubtful Accounts
Inventory
Total Current Assets
Vehicles
Accumulated Depreciation
Total Assets
Liabilities and Stockholders’ Equity
Liabilities
Current Liabilities:
Accounts Payable
Sales Tax Payable
Salaries and Wages Payable
FICA Payable
Withheld Income Taxes Payable
Unemployment Taxes Payable
Unearned Revenue
Income Taxes Payable
Total Current Liabilities
$ 94,360
31,395
(628)
1,260
126,387
10,000
(380)
$ 136,007
$ 4,410
1,845
1,600
600
500
400
750
3,750
13,855
C11–2 (continued)
Req. 4
Total compensation expense includes Salaries and Wages Expense ($4,000) and
Payroll Tax Expense ($400), for a total of $4,400.
Req. 5
The carrying value of the bond will increase after recording interest in February because
the interest expense will be greater than the interest payment. This difference will be
C11–2 (continued)
Req. 9
A 10% stock dividend would be considered a small stock dividend, which is recorded at
market value as shown below.
Retained Earnings
3,075
Common Stock (6,150 shares x 10% x $2 par)
Additional Paid-In Capital
1,230
1,845
[6,150 common shares outstanding (see req. 3) x 10% x $5 stock price = $3,075]
C11–2 (continued)
Req. 10 (continued)
Using the Financial Calculator App:
Present Value of Face Value Present Value of Interest Annuity