Question 1

Snow White Company borrowed $72,000 from Bank of Fairytales on December 1, 2019, and signed a 90 day, 8% Notes Payable.
If Snow White's accounting period ends on December 31, 2019, which of the following will not be true for Snow White Company?

Accepted Answer

At year-end, Snow White Company records the following entry:
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Question 2

On December 1, 2019, MAI Company purchased $60,000 of equipment by issuing a 120-day, 10% note payable to Bank of Washington.
Assuming the company's accounting period ends on December 31, the journal entry recorded by MAI Company on the note maturity date will include:

Accepted Answer

At year-end, MAI Company records the following entry:
11ee7946_7a25_720a_88d3_299baf0ab4ac_TBCB1007_11

Question 3

On December 1, 2019, Coke Company purchased $180,000 of equipment by issuing a 120-day, 10% note payable to Bank of Georgia.
Assuming the company's accounting period ends on December 31, the journal entry recorded by Coke Company on the note maturity date will include:

Accepted Answer

At year-end, Coke Company records the following entry:
11ee7946_8a4a_70eb_88d3_bde4be457c90_TBCB1007_11

Question 4

Kangaroo Company signed a three-month, 8% note on November 1, 2019 for the purchase of $120,000 of inventory.
Assuming the company's accounting period ends on December 31, which one of the following statements is not correct?

Accepted Answer

At year-end, Kangaroo Company records the following entry:
11ee7946_a0c0_691c_88d3_dbfafa1ecd6a_TBCB1007_11

Question 5

Wombat Company signed a three-month, 8% note on November 1, 2019 for the purchase of $360,000 of inventory.
Assuming the company's accounting period ends on December 31, which one of the following statements is not correct?

Accepted Answer

At year-end, Wombat Company records the following entry:
11ee7946_b0f1_4edd_88d3_436f85bfc5f9_TBCB1007_11

Question 6

Montana Company signed a $180,000, 90-day, 9% note payable, on December 1, 2019. If the accounting period ends on December 31, 2019, the entry made on the note's maturity (March 1, 2020) will include:

Accepted Answer

At year-end, Montana Company records the following entry:
11ee7946_c318_d47e_88d3_2b7c01bce6c6_TBCB1007_11

Question 7

Idaho Company signed a $540,000, 90-day, 9% note payable, on December 1, 2019. If the accounting period ends on December 31, 2019, the entry made on the note's maturity (March 1, 2020) will include:

Accepted Answer

At year-end, Idaho Company records the following entry:
11ee7946_d2dd_63df_88d3_c7030d539534_TBCB1007_11

Question 8

Charter Company has a total payroll of $780,000 which is subject to a 7.65% FICA tax. Assuming $180,000 was subject to state and federal unemployment tax rates of 4% and 0.8% respectively, the entry to accrue payroll taxes would include a:

Accepted Answer

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Question 9

Four Points Company has a total payroll of $2,340,000 which is subject to a 7.65% FICA tax. Assuming $540,000 was subject to state and federal unemployment tax rates of 4% and 0.8% respectively, the entry to accrue payroll taxes would include a:

Accepted Answer

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Question 10

Assume that the current rate for FICA social security is 6.2% (for the first $102,000 of an employee's salary) and the FICA Medicare rate is 1.45% for all salary. Also, the current FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%, which apply to the first $7,000 of an employee's pay. Assume that an employee earned $300,000 in 2019.
What is the employer's total payroll-related expense for this employee for 2019?

Accepted Answer

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Question 11

Assume that the current rate for FICA social security is 6.2% (for the first $102,000 of an employee's salary) and the FICA Medicare rate is 1.45% for all salary. Also, the current FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%, which apply to the first $7,000 of an employee's pay. Assume that an employee earned $525,000 in 2019.
What is the employer's total payroll-related expense for this employee for 2019?

Accepted Answer

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Question 12

Denver Company has a monthly gross payroll (paid on the last day of each month) of $172,000, which is subject to unemployment taxes (Federal at 0.8% and State at 5.4%). All earnings are subject to 7.65% FICA tax (combined Social Security and Medicare). Federal income tax withholdings are 25%, and state income tax withholdings are 8% of total earnings.
Assuming no individual employee has reached the maximum limit for Social Security tax or for unemployment tax, which of the following is not true for the month ended January 31?

Accepted Answer

Entry to record monthly payroll:
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Question 13

Pennsylvania Company has a monthly gross payroll (paid on the last day of each month) of $516,000, which is subject to unemployment taxes (Federal at 0.8% and State at 5.4%). All earnings are subject to 7.65% FICA tax (combined Social Security and Medicare). Federal income tax withholdings are 25%, and state income tax withholdings are 8% of total earnings.
Assuming no individual employee has reached the maximum limit for Social Security tax or for unemployment tax, which of the following is not true for the month ended January 31?

Accepted Answer

Entry to record monthly payroll:
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Question 14

Hola Company has 5 sales employees, each of whom earns $8,000 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 $220 for each employee.
The entry to accrue the company's monthly sales salaries expense on January 31 will not include:

Accepted Answer

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Question 15

Barker Company has 5 sales employees, each of whom earns $24,000 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 $660 for each employee.
The entry to accrue the company's monthly sales salaries expense on January 31 will not include:

Accepted Answer

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Question 16

Hola Company has 5 sales employees, each of whom earns $8,000 per month and is paid on the last working day of the month. The gross monthly payroll is subject to federal unemployment taxes of 0.8% and state unemployment taxes of 4.0%. All earnings are subject to FICA social security taxes of 6.2% and Medicare taxes of 1.45%. Withholding for each employee also includes federal income tax of 16% and monthly medical insurance premiums of $220 for each employee.
Monthly payroll tax expense will be:

Accepted Answer

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Question 17

Barker Company has 5 sales employees, each of whom earns $24,000 per month and is paid on the last working day of the month. The gross monthly payroll is subject to federal unemployment taxes of 0.8% and state unemployment taxes of 4.0%. All earnings are subject to FICA social security taxes of 6.2% and Medicare taxes of 1.45%. Withholding for each employee also includes federal income tax of 16% and monthly medical insurance premiums of $660 for each employee.
Monthly payroll tax expense for January 31 will be:

Accepted Answer

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Question 18

Sic 'n Span Inc. sells washing machines with a 2 year warranty. Sic 'n Span estimates that total warranty costs are 3% of sales. In the year 2019, Sic 'n Span recorded total sales of washing machines of $1,400,000. The balance in the Estimated Liability for Warranties account was $76,400 on December 31, 2018, and $51,200 on December 31, 2019.
What must have been the actual cost of repairs (covered under warranty) for the year 2019?

Accepted Answer

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Question 19

Laundry Needs, Inc. sells washing machines with a 2 year warranty. Laundry Needs estimates that total warranty costs are 3% of sales. In the year 2019, Washing Machines recorded total sales of washing machines of $4,200,000. The balance in the Estimated Liability for Warranties account was $229,200 on December 31, 2018, and $153,600 on December 31, 2019.
What must have been the actual cost of repairs (covered under warranty) for the year 2019?

Accepted Answer

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Question 20

Eastern Company estimates warranty expense as 5% of sales. On January 1, 2019 warranties payable was $20,000, and the December 31 liability for the warranty was $22,000. During the year Western recorded sales of $300,000.
The amount paid by Eastern during the year to meet its warranty obligations was:

Accepted Answer

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Quiz 10: Accounting for Liabilities

Snow White Company borrowed $72,000 from Bank of Fairytales on December 1, 2019, and signed a 90 day, 8% Notes Payable. If Snow White's accounting period ends on December 31, 2019, which of the following will not be true for Snow White Company?

On December 1, 2019, MAI Company purchased $60,000 of equipment by issuing a 120-day, 10% note payable to Bank of Washington. Assuming the company's accounting period ends on December 31, the journal entry recorded by MAI Company on the note maturity date will include:

On December 1, 2019, Coke Company purchased $180,000 of equipment by issuing a 120-day, 10% note payable to Bank of Georgia. Assuming the company's accounting period ends on December 31, the journal entry recorded by Coke Company on the note maturity date will include:

Kangaroo Company signed a three-month, 8% note on November 1, 2019 for the purchase of $120,000 of inventory. Assuming the company's accounting period ends on December 31, which one of the following statements is not correct?

Wombat Company signed a three-month, 8% note on November 1, 2019 for the purchase of $360,000 of inventory. Assuming the company's accounting period ends on December 31, which one of the following statements is not correct?

Montana Company signed a $180,000, 90-day, 9% note payable, on December 1, 2019. If the accounting period ends on December 31, 2019, the entry made on the note's maturity (March 1, 2020) will include:

Idaho Company signed a $540,000, 90-day, 9% note payable, on December 1, 2019. If the accounting period ends on December 31, 2019, the entry made on the note's maturity (March 1, 2020) will include:

Charter Company has a total payroll of $780,000 which is subject to a 7.65% FICA tax. Assuming $180,000 was subject to state and federal unemployment tax rates of 4% and 0.8% respectively, the entry to accrue payroll taxes would include a:

Four Points Company has a total payroll of $2,340,000 which is subject to a 7.65% FICA tax. Assuming $540,000 was subject to state and federal unemployment tax rates of 4% and 0.8% respectively, the entry to accrue payroll taxes would include a: