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Exam 11: Current Liabilities and Payroll

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Question 91

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A business issued a 120-day,6% note for $10,000 to a creditor on account.The company uses a 360-day year for interest calculations.Journalize the entries to record (a)the issuance of the note and (b)the payment of the note at maturity,including interest.

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*$10,000 ×...

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Question 92

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The proceeds from discounting a $20,000,60-day note payable at 6% is $20,200.

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Question 93

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The following totals for the month of June were taken from the payroll register of Arcon Company:​ The entry to record the payment of net pay would include a

An employee's take-home pay is equal to gross pay less all voluntary deductions.

McKay Company sells merchandise with a one-year warranty.In Year 1,sales consisted of 1,200 units.It is estimated that warranty repairs will average $10 per unit sold and 30% of the repairs will be made in Year 1 and 70% in Year 2.In the Year 1 income statement,McKay should show warranty expense of

Baker Green's weekly gross earnings for the week ending December 7 were $2,500,and her federal income tax withholding was $525.Prior to this week Green had earned $98,000 for the year.Assuming the social security rate is 6.0% and Medicare is 1.5%,what is Green's net pay?

Which of the following forms is typically given to employees at the end of the calendar year so that employees can file their individual income tax forms?

On August 1,Batson Company issued a 60-day note with a face amount of $140,000 to Jergens Company for merchandise inventory. (Assume a 360-day year is used for interest calculations.) a.Determine the proceeds of the note assuming the note carries an interest rate of 6%. b.Determine the proceeds of the note assuming the note is discounted at 6%.

During the first year of operations,employees earned vacation pay of $35,000.The vacations will be taken during the second year.The vacation pay expense should be recorded in the second year as the vacations are taken by the employees.

Use this information for Harris Company to answer the following questions. ​ Assuming no employees are subject to ceilings for their earnings, Harris Company has the following information for the pay period of January 15-31. ​ ​ -Salaries Payable would be recorded for

Which of the following is the most desirable quick ratio?

The payroll register is a multicolumn form used to assemble the payroll-related data for all employees.

Use the following key (a-d) to identify the proper treatment of each contingent liability. -Event is probable but amount is not estimable

Assuming a 360-day year,proceeds of $48,750 were received from discounting a $50,000,90-day note at a bank.The discount rate used by the bank in computing the proceeds was

Several months ago,Jones Company experienced a spill of hazardous materials into the White River from one of its plants.As a result,the Environmental Protection Agency (EPA)fined the company $405,000.The company contested the fine.In addition,an employee is seeking $180,000 damages related to the spill.Finally,a homeowner has sued the company for $260,000.Although the homeowner lives 30 miles downstream from the plant,he believes that the spill has reduced his home's resale value by $260,000.Jones' legal counsel believes the following will happen in relationship to these incidents:​ ​

Davis and Thompson have earnings of $850 each.The social security tax rate is 6.0%,and the Medicare tax rate is 1.5%.Assuming that the payroll will be paid on December 29,what will be the employer's total FICA tax for this payroll period?

Medicare taxes are paid by both the employee and the employer.

In a defined benefits plan,the employer bears the investment risks in funding a future retirement income benefit.

Wright Company sells merchandise with a one-year warranty.In the current year,sales consisted of 2,000 units.It is estimated that warranty repairs will average $15 per unit sold and 30% of the repairs will be made in the current year and 70% in the next year.In the current year's income statement,Wright should show warranty expense of

Payroll entries are made with data from the