Question 1

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 2

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...

Question 3

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...

Question 4

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 5

A company sells computers with a 6-month warranty. In January, the company sold 100,000 computers at $1,750 each and 1,500 computers were turned in for repairs during that same month. The total repairs amounted to $185,000 costs from the computer parts inventory. It is estimated that 2% of all units sold will need repairs under warranty at an estimated cost of $200 per unit. Prepare the journal entries to record (a) estimated warranty expense for January and (b) warranty repair costs for January.

Accepted Answer

The answer of A company sells computers with a 6-month...

Question 6

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...

Question 7

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 8

A company's employees had the following earnings records at the close of the current payroll period:
$$\begin{array} { | l | r | r | } 
\hline \text { Employees } & \begin{array} { r } 
\text { Earnings through } \
\text { Prior Pay Period }
\end{array} & \begin{array} { r } 
\text { Earnings this Pay } \
\text { Period }
\end{array} \
\hline \text { D. Adams } & \$ 11,300 & \$ 3,900 \
\hline \text { J. Hess } & 6,100 & 2,500 \
\hline \text { R. Lui } & 9,500 & 3,100 \
\hline \text { T. Morales } & 4,800 & 1,400 \
\hline \text { L. Vang } & 10,000 & 3,000 \
\hline
\end{array}$$

Accepted Answer

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

Question 9

A company's employer payroll taxes are 0.8% for federal unemployment taxes, 5.4% for state unemployment taxes, 6.2% for FICA social security taxes on earnings up to $106,800 and 1.45% for FICA Medicare taxes on all earnings. Compute the W-2 Wage and Tax Statement information required below for the following employees:
 $$\begin{array} { | l | r | r | } 
\hline \text { Employee } & \text { Gross Earnings } & \text { Federal Income Taxes Withheld } \
\hline \text { A. Barker } & \$ 84,000 & \$ 17,600 \
\hline \text { C. Dirkson } & 52,000 & 8,200 \
\hline
\end{array}$$ $$\begin{array} { | l | l | l | } 
\hline \text { W-2 Information } & \text { A. Baker } & \text { C. Dirkson } \
\hline \text { Federal Income Tax Withheld } & & \
\hline \text { Wages, Tips, Other Compensation } & & \
\hline \text { Social Security Tax Withheld } & & \
\hline \text { Social Security Wages } & & \
\hline \text { Medicare Tax Withheld } & & \
\hline \text { Medicare Wages } & & \
\hline
\end{array}$$

Accepted Answer

The answer of A company's employer payroll taxes are 0.8%...

Question 10

A company has 2 employees whose total January salaries are 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 2 employees whose total...

Question 11

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 12

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 13

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...

Question 14

A company sells personal computers, with an included two-year warranty for $2,300 each. During the current year, the company sells 400 computers. On the basis of past experience, the warranty costs are estimated to be $250 per computer. The actual warranty costs (paid in cash) by the company during the current year were $65,000. Prepare general journal entries to record the (a) estimated warranty expense and (b) warranty repair costs during current year.

Accepted Answer

The answer of A company sells personal computers, with an...

Question 15

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,...

Question 16

A company's payroll information for the month of May follows:
$$\begin{array} { | l | r | } 
\hline \text { Administrative salaries } & \$ 2,000 \
\hline \text { Sales salaries } & 3,500 \
\hline \text { Shop wages } & 4,000 \
\hline \text { FICA taxes withheld } & 700 \
\hline \text { Federal income taxes withheld } & 1,300 \
\hline \text { Medical insurance premiums withheld } & 415 \
\hline \text { Union dues withheld } & 205 \
\hline
\end{array}$$
On May 31 the company issued Check No. 335 payable to the Payroll Bank Account for the May payroll. It issued payroll checks to the employees after depositing the check.
(1) Prepare the journal entry to record (accrue) the employer's payroll for May. (2) Prepare the journal entry to pay for the May payroll. The federal and state unemployment tax rates are 0.8% and 5.4%, respectively, on the first $7,000 paid to each employee-the wages and salaries subject to these taxes were $6,000. (3) Prepare the journal entry to record the employer's payroll taxes.

Accepted Answer

The answer of A company's payroll information for the month...

Question 17

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.
  Salaries and Wages Expense = ($1,200 + $900 + $1,000) = $3,100
Federal Income Taxes Payable = ($216 + $162 + $180) = $558
Medical Insurance Payable = (125 + 125 + 150) = 400
Union Dues Payable = ($15 + $15) = $30
United Way Payable = ($15 + $30 + $20) = $65
FICA-Social Security Taxes Payable = ($3,100 x .062) = $192.20
FICA-Medicare Taxes Payable = ($3,100 x .0145) = $44.95

Accepted Answer

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

Question 18

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 19

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...

Question 20

The payroll records of a company provided the following data for the currently weekly pay period ended March 7.

Assume that the Social Security portion of the FICA taxes is 6.2% on the first $106,800 and the Medicare portion is 1.45% of all wages paid to each employee for this pay period. The federal and state unemployment tax rates are 0.8% and 5.4%, respectively, on the first $7,000 paid to each employee.
Calculate the net pay for each employee.

Accepted Answer

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

Quiz 9: Current Liabilities

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.

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.

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.

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.