Exam 11: Current Liabilities and Payroll

Martin Services Company provides its employees vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $39,500 for the period. The pension plan requires a contribution to the plan administrator equal to 9% of employee salaries. Salaries were $750,000 during the period. Provide the journal entries for (a) the vacation pay and (b) the pension benefit.

An interest-beating note is a loan in which the lender deducts interest from the amount loaned before the money is advanced to the borrower.

According to a summary of the payroll of Scotland Company, $450,000 was subject to the 6.0% social security tax and $500,000 was subject to the 1.5% Medicare tax. Federal income tax withheld was $98,000. Also, $15,000 was subject to state (4.2%) and federal (0.8%) unemployment taxes.? (a)Journalize the entry to record the accrual of payroll. (b)Journalize the entry to record the accrual of payroll taxes.

Use the following key (a-d) to identify the proper treatment of each contingent liability. -Event is probable but amount is not estimable

The journal entry a company uses to record accrued vacation privileges for its employees at the end of the year is

During the first year of operations, a company granted warranties on its products at an estimated cost of $8,500. The product warranty expense should be recorded in the years of the expenditures to repair the products covered by the warranty payments.

Current liabilities are

Martinez Co. borrowed $50,000 on March 1 of the current year by signing a 60-day, 9%, interest-bearing note. Assuming a 360-day year, when the note is paid on April 30, the entry to record the payment should include a

Federal unemployment taxes are paid by the employer and the employee.

Use this information for Harris Company to answer the following questions. ​ Assuming no employees are subject to ceilings for their earnings, Harris Company has the following information for the pay period of January 15-31. ​ Gross payroll \ 10,000 Federal income tax withheld \ 1,800 Social security rate 6.0\% Federal unemployment tax rate 0.8\% Medicare rate 1.5\% State unemployment tax rate 5.4\% ​ -Assume that social security taxes are payable at a 6.0% rate, Medicare taxes are payable at a 1.5% rate with no maximum earnings, and federal and state unemployment compensation taxes total 4.6% on the first $7,000 of earnings. If an employee earns $2,500 for the current week and the employee's year-to-date earnings before this week were $6,800, what is the total payroll tax related to the current week?

The journal entry to record the conversion of a $6,300 account payable to a note payable would be​

The journal entry used to record the issuance of a discounted note for the purpose of borrowing funds for the business is

A current liability is a debt that is reasonably expected to be paid

Assuming a 360-day year, when a $50,000, 90-day, 9% interest-bearing note payable matures, the total payment will be

Match each payroll item that follows to the one item (a-f) that best describes its characteristics. -Federal unemployment compensation tax (FUTA)

Which of the following is included in the employer's payroll taxes?

The journal entry a company uses to record partially funded pension rights for its salaried employees at the end of the year is

Match each payroll item that follows to the one item (a-f) that best describes its characteristics. -State unemployment compensation tax (SUTA)

A pension plan that requires the employer to make annual pension contributions, with no promise to employees regarding future pension payments, is termed

Use the following key (a-d) to identify the proper treatment of each contingent liability. -Event is probable and amount is estimable