FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 10: Current Liabilities and Payroll

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Multiple Choice

Review LaterAdd Note

Review Later

Zennia Company provides its employees with varying amount of vacation per year, depending on the length of employment. The estimated amount of the current year's vacation cost is $165,000. The journal entry to record the adjusting entry required on December 31, the end of the current year, to record the current month's accrued vacation pay is

A) $165,000
B) $82,500
C) $0
D) $13,750

E) B) and C)
F) None of the above

Correct Answer

verified

Show Answer

Question 2

Essay

Review LaterAdd Note

Review Later

Journalize the following, assuming a 360-day year is used for interest calculations:

Correct Answer

verified

Show Answer

Question 3

True/False

Review LaterAdd Note

Payroll taxes levied against employers become an employer liability at the time the employee wages are incurred.

For Company A and Company B:

An employee receives an hourly rate of $15, with time and a half for all hours worked in excess of 40 during the week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $120; cumulative earnings for the year prior to this week, $5,500; Social security tax rate, 6% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings; state unemployment compensation tax, 3.4% on the first $7,000; federal unemployment compensation tax, .8% on the first $7,000. Prepare the journal entries to record the salaries expense and the employer payroll tax expense.

On June 8, Alton Co. issued an $80,000, 6%, 120-day note payable to Seller Co. Assume that the fiscal year of Seller Co. ends June 30. Using the 360-day year in your calculations, what is the amount of interest revenue recognized by Seller in the following year?

The Core Company had the following assets and liabilities as of December 31, 2012: Calculate: Current Ratio, Working Capital and Quick Ratio

On July 8, Alton Co. issued an $80,000, 6%, 120-day note payable to Seller Co. Assume that the fiscal year of Alton Co. ends July 31. Using the 360-day year in your calculations, what is the amount of interest expense recognized by Alton in the current fiscal year?

Aqua Construction installs swimming pools. They calculate that warranty obligations are 5% of gross sales. For the year just ending Aqua's gross sales were $1,500,000. Due to previous quarter recognitions, the Warranty Liability account has a credit balance of $48,700. Determine the year's total warranty liability and journalize any necessary value to establish the year's liability at December 31st.

The accounting for defined benefit plans is usually very easy and straight forward.

Elgin Company sells merchandise with a one year warranty. Sales consisted of 2,500 units in 2012 and 2,000 units in 2013. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in 2012 and 70% in 2013 for the 2012 sales. Similarly, 30% of repairs will be made in 2013 and 70% in 2014 for the 2013 sales. In the 2013 income statement, how much of the warranty expense shown will be due to 2012 sales?

The following totals for the month of February were taken from the payroll register of Arcon Company: How much is the total payroll expense for Arcon Company for this payroll? Assume that the monthly salaries expense remains the same for the entire year and no employees are hired or fired during that time. Based on what you learned in Chapter 11 about payroll taxes, do you expect the total payroll expense to stay the same every month? Explain.

Interest expense is reported in the operating expense section of the income statement.

Form W-2 is called the Wage and Tax Statement.

Federal unemployment compensation tax becomes an employer's liability at the time the employee is paid.

Which of the following would be used to compute the federal income taxes to be withheld from an employee's earnings?

Another name for the quick ratio is

For paying their payroll, most employers use payroll checks drawn on a special bank account.

Prior to the last weekly payroll period of the calendar year, the cumulative earnings of employees A and B are $99,350 and $91,000 respectively. Their earnings for the last completed payroll period of the year are $850 each. The amount of earnings subject to social security tax at 6% is $100,000. All earnings are subject to Medicare tax of 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 on the two salary amounts of $850 each?

Martin Services Company provides their employees vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $43,000 for the period. The pension plan requires a contribution to the plan administrator equal to 9% of employee salaries. Salaries were $600,000 during the period. Provide the journal entry for (a.) the vacation pay and (b.) the pension benefit.