Question 1

A company has three employees.Total salaries for the month of January were $8,000.The federal income tax rate for all employees is 15%.The FICA-social security tax rate is 6.2% and the FICA-Medicare tax rate is 1.45%.Calculate the amount of employee taxes withheld and prepare the company's journal entry to record the January payroll assuming these were the only deductions.

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Question 2

A company has 90 employees and a weekly payroll of $117,000.The FICA-social security tax withheld totals $7,254 and the FICA-Medicare tax withheld totals $1,696.50.The total withholding for federal income tax is $16,500.Prepare the journal entry to accrue this week's salaries expense and withholdings.

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Question 3

Identify and explain the types of employer payroll taxes.

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Question 4

A company's payroll for the week ended May 15 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 0.6%.By May 15,some employees had earned over $7,000,so only $11,000 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.

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Question 5

On June 1,Jasper 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 Jasper Company's general journal entry to record the issuance of the note payable.
c.Prepare Jasper Company's general journal entry to record the payment of the note on September 29.

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Question 6

Identify and discuss the factors involved in computing federal income taxes withheld from employees.

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Question 7

What are estimated liabilities? Cite at least two examples and explain why they are classified as estimated liabilities.

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Question 8

What is a short-term note payable? Explain the accounting issues related to notes payable.

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Question 9

Explain how to calculate times interest earned and how it is used to analyze a company's risk.

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Question 10

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

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Question 11

On November 1,Casey's Snowboards signed a $12,000,90-day,5% note payable to cover a past due account payable.
a.What amount of interest expense on this note should Casey's Snowboards report on year-end December 31?
b.Prepare Casey's journal entry to record the issuance of the note payable.
c.Prepare Casey's adjusting journal entry at the end of the year
d.Prepare Casey's journal entry to record the payment of the note on February 1 of the following year.

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Question 12

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.

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Question 13

Explain the responsibilities of and the accounting by employers for deductions from employee payroll.

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Question 14

What are known current liabilities? Cite at least two examples of known current liabilities.

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Question 15

Describe employer responsibilities for reporting payroll taxes.(To the extent possible,reference the form to be filed for each tax.)

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Question 16

A company borrowed $60,000 by signing a 60-day,5% note payable from its bank.Compute the total cash payment due on the note's maturity date.

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Question 17

Santa Barbara Express has 4 sales employees,each of whom earns $5,000 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 Santa Barbara Express include FICA taxes,federal unemployment taxes of 0.6% 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 Santa Barbara Express.(Assume that none of the employees has reached the unemployment limit of $7,000.)

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Question 18

Calculate the total amount of FICA withholding for an employee whose pay is $2,400 for the first pay period of the year.The tax rate for FICA-Social Security is 6.2% and the tax rate for FICA-Medicare is 1.45%.

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Question 19

Describe contingent liabilities and how to account for and/or report them.

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Question 20

An employee earns $9,450 for the current period.The cumulative earnings of previous pay periods is $118,700.Social security tax applies to the first $127,200 of employee earnings.Calculate the total and individual amounts to be withheld for social security (6.2%),Medicare (1.45%)and federal income tax (15%).

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Quiz 9: Reporting and Analyzing Current Liabilities