One Trick Pony (OTP) incorporated and began operations near the end of the year, resulting in the following post-closing

[answerhappygod]

One Trick Pony (OTP) incorporated and began operations near theend of the year, resulting in the following post-closing balancesat December 31:
Cash $ 52,200
Accounts Receivable 13,600
Allowance for Doubtful Accounts 390*
Inventory 3,500
Deferred Revenue (40 units) 5,200
Accounts Payable 1,590
Notes Payable (long-term) 36,000
Common Stock 21,600
Retained Earnings 4,520 * credit balance.
The following information is relevant to the first month ofoperations in the following year: OTP will sell inventory at $130per unit. OTP’s January 1 inventory balance consists of 50 units ata total cost of $3,500. OTP’s policy is to use the FIFO method,recorded using a perpetual inventory system. In December, OTPreceived a $5,200 payment for 40 units OTP is to deliver inJanuary; this obligation was recorded in Deferred Revenue. Rent of$1,040 was unpaid and recorded in Accounts Payable at December 31.OTP’s notes payable mature in three years, and accrue interest at a10% annual rate. January Transactions Included in OTP’s January 1Accounts Receivable balance is a $3,600 balance due from JeffLetrotski. Jeff is having cash flow problems and cannot pay the$3,600 balance at this time. On 01/01, OTP arranges with Jeff toconvert the $3,600 balance to a six-month note, at 10% annualinterest. Jeff signs the promissory note, which indicates theprincipal and all interest will be due and payable to OTP on July 1of this year. OTP paid a $160 insurance premium on 01/02, coveringthe month of January; the payment is recorded directly as anexpense. OTP purchased an additional 200 units of inventory from asupplier on account on 01/05 at a total cost of $8,000, with termsn/30. OTP paid a courier $400 cash on 01/05 for same-day deliveryof the 200 units of inventory. The 40 units that OTP’s customerpaid for in advance in December are delivered to the customer on01/06. On 01/07, OTP received a purchase allowance of $1,200 onaccount, and then paid the amount necessary to settle the balanceowed to the supplier for the 1/05 purchase of inventory (in c).Sales of 60 units of inventory occurring during the period of01/07–01/10 are recorded on 01/10. The sales terms are n/30.Collected payments on 01/14 from sales to customers recorded on01/10. OTP paid the first 2 weeks’ wages to the employees on 01/16.The total paid is $4,400. Wrote off a $1,190 customer’s accountbalance on 01/18. OTP uses the allowance method, not the directwrite-off method. Paid $2,080 on 01/19 for December and Januaryrent. See the earlier bullets regarding the December portion. TheJanuary portion will expire soon, so it is charged directly toexpense. OTP recovered $480 cash on 01/26 from the customer whoseaccount had previously been written off on 01/18. An unrecorded$120 utility bill for January arrived on 01/27. It is due on 02/15and will be paid then. Sales of 70 units of inventory during theperiod of 01/10–01/28, with terms n/30, are recorded on 01/28. Ofthe sales recorded on 01/28, 10 units are returned to OTP on 01/30.The inventory is not damaged and can be resold. OTP charges salesreturns to a contra-revenue account. On 01/31, OTP records the$4,400 employee salary that is owed but will be paid February 1.OTP uses the aging method to estimate and adjust for uncollectibleaccounts on 01/31. All of OTP’s accounts receivable fall into asingle aging category, for which 10% is estimated to beuncollectible. (Update the balances of both relevant accounts priorto determining the appropriate adjustment.) Accrue interest forJanuary on the notes payable on 01/31. Accrue interest for Januaryon Jeff Letrotski’s note on 01/31 (see a).