Jones Widget Company (JWC) incorporated at the beginning of 2014. Below is the post closing trial balance as of 12/31/2014.

JWC establishes a policy that it will sell inventory at $160 per unit. Sales taxes are 6%. JWC will use the FIFO method and record COGS on a perpetual basis.

Employee wages are $4,100 per month. Employees are paid on the 16th for the first half of the month and on the first of the following month for the second half of each month. The income taxes withheld are $275 each paycheck, and the FICA taxes are $175 per paycheck. The withholding and the employer’s matching contribution are paid monthly on the second day of the month. In addition, unemployment taxes of $55 are accrued with each payroll. The taxes are paid on March 31.

The Beginning inventory of $12,060 consists of 180 units.

The equipment was purchased on July 1, 2014. It is being depreciated using the straight line method.

Unearned Revenue is for 40 units ordered and paid for in advance by two customers in late December. One order will be filled in January, the remainder in early February.

The Notes payable represents a $15,000 bank loan received on October 1, 2013 at 8% annual interest.

A truck is purchased for $10,500 cash. It is estimated the truck will be used for 50,000 miles and will have no salvage value. (Record the purchase to the account “Vehicles”).

Payroll taxes payable (FIT & FICA) recorded in December are remitted to the IRS.

Sales on account of 175 units of inventory occur during January. Include sales tax of 6%.

Sales taxes of $550 which had been collected and recorded in December are paid to the state.

The equipment purchased in 2014 for $26,000 is sold for $24,000. No additional depreciation is recorded for January.

Having sold the equipment, JWC pays off the note in full. The amount paid is $15,345 which includes an additional $45 interest through Jan 14.

A portion of the advance order from December (35 units) is delivered. There is no sales tax on this order.

Record and pay payroll for January 1-15. Record the employer’s matching share of FICA taxes And the unemployment taxes also.

JWC declares and distributes a 10% Stock dividend. The market price of the stock at the time is $5 per share. (Hint on the statement of retained earnings, this amount will should be shown as a dividend).

(Adjusting 1) Record depreciation on the truck. During January, the truck is driven 2,000 miles.

(Adjusting 2) It is estimated that 3% of the ending accounts receivable balance will be uncollectible.

(Adjusting 4) Accrue January 31 payroll, which will be payable on February 1. Record the employer’s matching share of FICA taxes also.

(Adjusting 5) Record ONE MONTH’S interest expense and amortization of premium or discount on the bond. Round to the nearest dollar.