Question 1

An employee earned $3,450 wages 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 wages for the...

Question 2

On June 1,2013,Martin Company signed a $25,000,120-day,6% note payable to cover a past due account payable.This company uses a calendar year to report financial activity.
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 29,2013 assuming no adjusting entries have been made since this note was first issued.

Accepted Answer

The answer of On June 1,2013,Martin Company signed a $25,000,120-day,6%...

Question 3

A company's income before interest expense and income taxes was $395,000 in 2013 and $427,000 in 2014.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 4

A company has two employees whose January salaries totaled $8,000.The federal income tax rate for both employees is 15%.The FICA Social Security tax is 6.2% and the FICA Medicare tax is 1.45%.Calculate the amount of employee taxes withheld and prepare the company's journal entry to accrue the January salaries expense and withholding of January taxes.

Accepted Answer

The answer of A company has two employees whose January...

Question 5

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.

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Question 6

A company's income before interest expense and income taxes is $302,400 and its interest expense is $72,000.Calculate the company's times interest earned ratio.

Accepted Answer

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

Question 7

On December 1,2013,Gates Company borrowed $45,000 cash from First Bank on a 90-day,9% note payable.Gates is a calendar year company
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 31,2013.
c.Prepare Gate's general journal entry to record the payment of the note on March 1,2014.
Assume no other entries related to this note were made in 2014.

Accepted Answer

The answer of On December 1,2013,Gates Company borrowed $45,000 cash...

Question 8

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 (assume 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 9

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 0.8%.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.

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

Question 10

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.

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

Question 11

On November 1,2012,Bob's Skateboards Store signed a $12,000,3-month,5% note payable to cover a past due account payable.This company uses a calendar year to report financial activity and updates the accounting records monthly.
a.What amount of total interest will the company pay on this note?
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 1,2013.

Accepted Answer

The answer of On November 1,2012,Bob's Skateboards Store signed a...

Question 12

A company's income before interest expense and income taxes was $225,000 in 2013 and $200,000 in 2014.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 13

On September 15,Sports World borrowed $75,000 cash from First Bank on a 12%,60-day note payable.
a.Prepare Sports World's general journal entry to record the issuance of the note payable.
b.Prepare Sports World's general journal entry to record the payment of the note at maturity assuming no adjusting entries have been made since the note was first issued.

Accepted Answer

The answer of On September 15,Sports World borrowed $75,000 cash...

Question 14

A company had income before interest expense and income taxes of $176,000 and its interest expense is $55,000.Calculate the company's times interest earned ratio.

Accepted Answer

The answer of A company had income before interest expense...

Question 15

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 16

Identify and discuss the factors involved in withholding federal income taxes from employees' pay.

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The answer of Identify and discuss the factors involved in...

Question 17

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...

Question 18

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

Accepted Answer

The answer of Coca-Cola had income before interest expense and...

Question 19

Walmart 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 Walmart had income before interest expense and...

Question 20

Metro Express has five 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% on the first $7,000 paid to each employee,and state unemployment taxes of 4.0% on 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.

Accepted Answer

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

Quiz 9: Reporting and Analyzing Current Liabilities

An employee earned $3,450 wages 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.

A company's income before interest expense and income taxes was $395,000 in 2013 and $427,000 in 2014.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.

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.

A company's income before interest expense and income taxes is $302,400 and its interest expense is $72,000.Calculate the company's times interest earned ratio.

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.

A company's income before interest expense and income taxes was $225,000 in 2013 and $200,000 in 2014.Its interest expense was $45,000 for both years.Calculate the company's times interest earned ratio and comment on its level of risk.

A company had income before interest expense and income taxes of $176,000 and its interest expense is $55,000.Calculate the company's times interest earned ratio.

Identify and discuss the factors involved in withholding federal income taxes from employees' pay.

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.

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