Exam 11: Current Liabilities and Payroll Accounting

During August,Boxer Company sells $356,000 in merchandise that has a one year warranty.Experience shows that warranty expenses average about 5% of the selling price.The warranty liability account has a credit balance of $12,800 before adjustment.Customers returned merchandise for warranty repairs during the month that used $9,400 in parts for repairs.The entry to record the estimated warranty expense for the month is:

During June,Vixen Fur Company sells $850,000 in merchandise that has a one year warranty.Experience shows that warranty expenses average about 3% of the selling price.Customers returned $14,000 of merchandise for warranty replacement during the month.The entry to record the estimated warranty provision at the end of the month is:

The Federal Insurance Contributions Act (FICA)requires that each employer file a:

A short-term note payable:

Furniture World is required by law to collect and remit sales taxes to the state.If Furniture World has $78,000 of cash sales that are subject to a 6% sales tax,what is the journal entry to record the cash sales?

If a company uses a special payroll bank account:

Banks authorized to accept deposits of amounts payable to the federal government,including amounts due for payroll taxes are _________________________________.

Obligations due within one year or the company's operating cycle,whichever is longer,are ________________________.

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%.

Richardson Fields receives $31,680 cash in advance ticket sales for 11 home soccer games.Record the advance ticket sales on March 31.Record the revenue earned for the first game played on August 17.

Portia Grant is an employee who is paid monthly.For the month of January of the current year,she earned a total of $8,260.The FICA tax for social security is 6.2% and the FICA tax rate for Medicare is 1.45%.The FUTA tax rate of .6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee's pay.The amount of federal income tax withheld from her earnings was $1,325.17.Her net pay for the month is:

If the times interest earned ratio:

On November 1,Alan Company signed a 120-day,8% note payable,with a face value of $9,000.What is the adjusting entry for the accrued interest at December 31 on the note?

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.

On September 1,Knack Company signed a $50,000,90-day,5% note payable with Central Savings Bank.What is the journal entry that should be recorded by Knack upon maturity of the note?

Short-term notes payable:

Trey Morgan is an employee who is paid monthly.For the month of January of the current year,he earned a total of $4,538.The FICA tax for social security is 6.2% and the FICA tax rate for Medicare is 1.45% for both the employee and the employer.The amount of federal income tax withheld from his earnings was $680.70.What is the total amount of taxes withheld from the Trey's earnings?

On November 1,Alan Company signed a 120-day,8% note payable,with a face value of $9,000.What is the maturity value of the note on March 1?

A _______________________ is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle,whichever is longer.

Gross pay is: