Exam 9: Reporting and Analyzing Current Liabilities

A ________ is a potential obligation that depends on a future event arising from a past transaction or event.

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.

The rate that a state assigns reflecting a company's stability or instability in employing workers is the:

On April 12,Hong Company agrees to accept a 60-day,10%,$4,500 note from Indigo Company to extend the due date on an overdue account.What is the journal entry that Indigo Company would make,when it records payment of the note on the maturity date? (Use 360 days a year.)

Payments of FUTA are made quarterly to a federal depository bank if the total amount due exceeds $500.

Even if the end of an accounting period occurs between the signing of a note payable and its maturity date,the expense recognition principle requires that interest expense not be accrued on a note payable until the note is paid.

An executive for ABC Corporation earns $170,000 per year.FICA tax for Social Security is 6.2% on the first $127,200 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings.The FUTA tax rate is 0.6%,and the SUTA tax rate is 5.4%.Both unemployment taxes are applied to the first $7,000 of an employee's pay.What is the amount of the employer's payroll taxes expenses for this employee?

General Co.entered into the following transactions involving short-term notes payable. On May 14,General purchased $40,000 merchandise from Steller Co.,terms are 2/15,n/30.General uses the perpetual inventory system.On May 29,General replaced the May 14 account payable with a 60-day,$36,000 note bearing 8% annual along with paying $4,000 in cash.On July 28,General paid the amount due on the note at maturity. Prepare journal entries for all the preceding transactions and events.

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

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.