Exam 9: Reporting and Analyzing Current Liabilities

Athena Company provides employee health insurance that costs $5,000 per month.In addition,the company contributes an amount equal to 5% of the employees' $120,000 gross salary to a retirement program.The entry to record the accrued benefits for the month would include a:

A company's employer payroll tax rates are 0.6% for federal unemployment taxes,5.4% for state unemployment taxes,6.2% for FICA social security taxes on earnings up to $127,200,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: Employee Gross Earnings Federal Income Taxes Withheld A.Baylor $114,000 $17,600 C.Jasmine 52,000 8,200 A.Baylor C.Jasmine W-2 Information: ________ ________ Federal Income Tax Withheld…………..________ ________ Wages,Tips,Other Compensation……...________ ________ Social Security Tax Withheld…………...________ ________ Social Security Wages…………………..________ ________ Medicare Tax Withheld………………… ________ ________ Medicare Wages………………………… ________ ________

On December 1,Watson Enterprises signed a $24,000,60-day,4% note payable as replacement of an account payable with Erikson Company.What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.)

Each employee records the number of withholding allowances claimed on the withholding allowance certificate that is filed with the employer,which is the Form W-4.

Times interest earned is calculated by:

Carson Company faces a probable loss on a pending lawsuit where the amount of the loss is estimated to be $500,000.The journal entry to recognize the potential loss is:

Companies with many employees rarely use a special payroll bank account from which to pay employees.

Companies with many employees often use a special ________ account to pay employees.

A single liability cannot be divided between current and noncurrent liabilities.

An estimated liability:

Employees earn vacation pay at the rate of one day per month.During the month of June,10 employees qualify for one vacation day each.Their average daily wage is $150 per day.Which of the following is the necessary adjusting journal entry to record the June vacation benefits?

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?

FICA taxes include:

Interest expense is not:

During June,Vixen 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 settle the customer warranties is:

On May 22,Jarrett Company borrows $7,500 from Fairmont Financing,signing a 90-day,8%,$7,500 note.What is the journal entry needed to record the transaction by Jarrett Company?

Unearned revenues are current liabilities.

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 customer warranty repairs is:

To compute the amount of tax withheld from an employee's pay,employers can use a ________ table.

Gross pay is: