Question 1

A company borrowed $60,000 on a 60-day,10% note payable from its bank.Compute the total cash payment at the note's maturity.

Accepted Answer

The answer of A company borrowed $60,000 on a 60-day,10%...

Question 2

A company's employees had the following earnings records at the close of the current payroll period:
 $\begin{array}{|l|r|r|}
\hline\text { Employees } & \begin{array}{c}
\text { Earnings through } \
\text { Prior Pay Period }
\end{array} & \begin{array}{c}
\text { Earnings this Pay } \
\text { Period }
\end{array}\
\hline \text { D. Adams } & \$ 11,300 & \$ 3,900 \
\hline \text { J. Hess } & 6,100 & 2,500 \
\hline \text { R. Lui } & 9,500 & 3,100 \
\hline \text { T. Morales } & 4,800 & 1,400 \
\hline \text { L. Vang } & 10,000 & 3,000\
\hline
\end{array}$ 
The company's payroll taxes expense on each employee's earnings includes: FICA Social Security taxes of 6.2% on the first $87,000 plus 1.45% FICA Medicare on all wages; 0.8% federal unemployment taxes on the first $7,000; and 2.5% state unemployment taxes on the first $7,000.Compute the employer's total payroll taxes expense for the current pay period.

Accepted Answer

The answer of A company's employees had the following earnings...

Question 3

An employer has an employee benefit package that includes employer-paid health insurance and employer-paid retirement program.During January,the employer-paid health insurance equaled $7,500 and the amount the employer agreed to contribute to the employee retirement program an amount equal to 10% of the employees' $150,000 gross salaries.Prepare the general journal entry to record these employee benefits.

Accepted Answer

The answer of An employer has an employee benefit package...

Question 4

An employee earned $3,450 for the current period.Calculate the total and individual amounts to be withheld for social security (6.2%),Medicare (1.45%)and federal income tax (15%)assuming the entire employee's pay is subject to FICA taxes.

Accepted Answer

The answer of An employee earned $3,450 for the current...

Question 5

Home Depot had income before interest expense and income taxes of $5,909 million and interest expense of $37 million.Calculate Home Depot's times interest earned ratio.

Accepted Answer

The answer of Home Depot had income before interest expense...

Question 6

The payroll records of a company provided the following data for the weekly pay period ended December 7:
  
The FICA social security tax rate is 6.2% and the FICA Medicare tax rate is 1.45% on all of this week's wages paid to each employee.The federal and state unemployment tax rates are 0.8% and 5.4%,respectively,on the first $7,000 paid to each employee.Prepare the journal entries to (a)accrue the payroll and (b)record payroll taxes expense.

Accepted Answer

The answer of The payroll records of a company provided...

Question 7

A company's payroll for the week ended May 15 and included earned salaries of $20,000.All of that week's pay is subject to FICA social security taxes of 6.2% and Medicare taxes of 1.45%.In addition,the company withholds the following amounts for this weekly pay period: $900 for medical insurance,$3,400 for federal income taxes and $180 for union dues.
a. Prepare the general journal entry to accrue the payroll
b. The company is subject to state unemployment taxes at the rate of 2% and federal unemployment taxes at the rate of 0.8%. By May 15, some employees had earned over $7,000, so only $9,000 of the $20,000 weekly gross pay was subject to unemployment tax. Prepare the general journal entry to accrue the employer's payroll tax expense.

Accepted Answer

The answer of A company's payroll for the week ended...

Question 8

On September 15,SportsWorld borrowed $75,000 cash from FirstBank on a 12%,60-day note payable.
a. Prepare SportsWorld's general journal entry to record the issuance of the note payable
b. Prepare SportsWorld's general journal entry to record the payment of the note at maturity.

Accepted Answer

The answer of On September 15,SportsWorld borrowed $75,000 cash from...

Question 9

A company's income before interest expense and income taxes was $395,000 in 2010 and $427,000 in 2011.Its fixed interest expense was $125,000 for both years.Calculate the company's times interest earned ratio and comment on its level of risk.

Accepted Answer

The answer of A company's income before interest expense and...

Question 10

The rate for FICA-social security is 6.2% and the rate for FICA-Medicare is 1.45%.Calculate the total amount of FICA withholding for an employee whose pay is $2,400 and is entirely subject to these FICA taxes.

Accepted Answer

The answer of The rate for FICA-social security is 6.2%...

Question 11

On December 1,2010 Gates Company borrowed $45,000 cash from FirstBank on a 90-day,9% note payable.
a. Prepare Gate's general journal entry to record the issuance of the note payable
b. Prepare Gate's general journal entry to record the accrued interest due at December 31, 2010
c. Prepare Gate's general journal entry to record the payment of the note on March 1, 2013.

Accepted Answer

The answer of On December 1,2010 Gates Company borrowed $45,000...

Question 12

On June 1,2010,Martin Company signed a $25,000,120-day,6% note payable to cover a past due account payable.
a. What is the total amount of interest to be paid on this note?
b. Prepare Martin Company's general journal entry to record the issuance of the note payable
c. Prepare Martin Company's general journal entry to record the payment of the note on
September 29, 2010.

Accepted Answer

The answer of On June 1,2010,Martin Company signed a $25,000,120-day,6%...

Question 13

On November 1,2009,Bob's Skateboards Store signed a $12,000,3-month,5% note payable to cover a past due account payable.
a. What amount of interest expense on this note should Bob's Skateboards Store report?
b. Prepare Bob's general journal entry to record the issuance of the note payable
c. Prepare Bob's general journal entry to record the payment of the note on February 1, 2010.

Accepted Answer

The answer of On November 1,2009,Bob's Skateboards Store signed a...

Question 14

A company has 90 employees and a weekly payroll of $117,000.The FICA-social security tax is 6.2% and the FICA-Medicare tax is 1.45%.The total withholding for federal income tax is $16,500 for the current week.Calculate the amount of FICA taxes owed (assuming no employee's salary is over the FICA limit)and prepare the journal entry to accrue this week's salaries expense and withholdings.

Accepted Answer

The answer of A company has 90 employees and a...

Question 15

Coke had income before interest expense and income taxes of $5,698 million and interest expense of $199 million.Calculate Coke's times interest earned ratio.

Accepted Answer

The answer of Coke had income before interest expense and...

Question 16

A company's income before interest expense and income taxes in 2010 was $225,000 and $200,000 in 2011.Its interest expense was $45,000 for both years.Calculate the company's times interest earned ratio and comment on its level of risk.

Accepted Answer

The answer of A company's income before interest expense and...

Question 17

Wal-Mart had income before interest expense and income taxes of $12,581 million and interest expense of $1,063 million.Sears had income before interest expense and income taxes of $3,596 million and interest expense of $1,143 million.Calculate the times interest earned ratio for each company and comment on the results.

Accepted Answer

The answer of Wal-Mart had income before interest expense and...

Question 18

Metro Express has 5 sales employees,each of whom earns $4,000 per month and is paid on the last working day of the month.Each employee's wages are subject to FICA social security taxes of 6.2% and Medicare taxes of 1.45% on all wages.Withholding for each employee also includes federal income tax of 16% and monthly medical insurance premiums of $110 for each employee.
a. Prepare the general journal entry to accrue the monthly sales salaries expense at January 31
b. The employer payroll taxes for Metro Express include FICA taxes, federal unemployment taxes of 0.8% of the first $7,000 paid each employee and state unemployment taxes of 4.0% of the first $7,000 paid to each employee. Prepare the journal entry to record the employer's payroll taxes at January 31 for Metro Express. (Assume that none of the employees has reached the unemployment limit of $7,000.)

Accepted Answer

The answer of Metro Express has 5 sales employees,each of...

Question 19

______________ are amounts owed to suppliers for products or services purchased on credit.

Accepted Answer

The answer of ______________ are amounts owed to suppliers for...

Question 20

Pastimes Co.offers its employees a bonus equal to 2% of the company's net income.The estimated net income for the year is expected to be $850,000.Prepare the general journal entry to record the employee bonus plan expense.

Accepted Answer

The answer of Pastimes Co.offers its employees a bonus equal...

Quiz 9: Reporting and Analyzing Current Liabilities