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Exam 10: Current Liabilities and Payroll

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Question 81

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Use the following information to answer the following questions. The following totals for the month of April were taken from the payroll register of Magnum Company. The journal entry to record the monthly payroll on April 30 would include a

A) credit to Salaries Payable for $8,150
B) debit to Salaries Expense for $7,902
C) debit to Salaries Payable for $8,150
D) debit to Salaries Payable for $7,902

E) A) and D)
F) A) and C)

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Question 82

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Journalize the following entries on the books of the borrower and creditor. Label accordingly. (Assume a 360-day year is used for interest calculations.)

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Question 83

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

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.

Each year there is a ceiling for the amount that is subject to all of the following except

A loan in which the lender deducts interest from the amount borrowed before the money is advanced to the borrower is called an interest bearing note.

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

Taxes deducted from an employee's earnings to finance social security and Medicare benefits are called FICA taxes.

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 June 8, Alton Co. issued an $80,000, 6%, 120-day note payable on an overdue account payable to Seller Co. Assume that the fiscal year of Alton Co. ends June 30. Which of the following relationships is true?

Dixon Sales has seven sales employees which receive weekly paychecks. Each earns $10.25 per hour and each has worked 40 hours in the pay period. Each employee pays 12% of gross in Federal Income Tax, 3% in State Income Tax, 6% of gross in Social Security Tax, 1.5% of gross in Medicare Tax, and 1/2% in State Disability Insurance. Journalize the recognition of the pay period ending January 19th which will be paid to the employees January 26th. (Keep in mind that none of the employees is subject to a ceiling amount for social security.)

Florida Keys Construction installs swimming pools. They calculate that warranty obligations are 3% of gross sales. For the year just ending Florida Keys' gross sales were $1,450,000. Due to previous quarter recognitions, the Warranty Liability account has a credit balance of $28,700. Determine the year's total warranty liability and journalize any necessary value to establish the year's liability at December 31st.

For Company A and Company B:

A defined contribution plan promises employees a fixed annual pension benefit.

Chang Co. issued a $50,000, 120-day, discounted note to Guarantee Bank. The discount rate is 6%. Assuming a 360-day year, the cash proceeds to Chang Co. are

The summary of the payroll for the monthly pay period ending July 15 indicated the following: Journalize the entries to record (a) the payroll and (b) the employer's payroll tax expense for the month. The state unemployment tax rate is 3.1%, and the federal unemployment tax rate is 0.8%. Only $25,000 of salaries are subject to unemployment taxes.

Assume that social security taxes are payable at a 6% rate on the first $100,000 of earnings and Medicare taxes are payable at a 1.5% rate with no maximum earnings, and that federal and state unemployment compensation taxes total 4.6% on the first $7,000 of earnings. If an employee, George Jones, earns $2,500 for the current week and Jones' year-to-date earnings before this week were $6,800, what is the total payroll taxes related to the current week?

Estimating and recording product warranty expense in the period of the sale best follows which of the following accounting concepts?

On January 5, 2014, Garrett Company, a calendar-year company, issued $1,000,000 of notes payable, of which $200,000 is due on January 1 for each of the next five years. The proper balance sheet presentation on December 31, 2014, is

Most employers are required to withhold from employees which of the following employment taxes?