Exam 11: Current Liabilities and Payroll Accounting

With an interest-bearing note the amount of cash received upon issuance of the note generally exceeds the note's face value.

FICA taxes are a deduction from employee earnings and are also imposed upon employers as an expense.

Identify the three types of employer payroll taxes. (b) How are tax liability accounts and payroll tax expense accounts classified in the financial statements?

Maddy Peters's regular hourly wage rate is $14 and she receives an hourly rate of $21 for work in excess of 40 hours. During a March pay period Maddy works 47 hours. Maddy's federal income tax withholding is $80 and she has no voluntary deductions. Prepare the journal entry to record Maddy's pay for the period. Use March 15 for the end of the pay period.

Which of the following employees would likely receive a salary instead of wages?

Watunga County Bank agrees to lend Hoffman Granite Company $600000 on January 1. Hoffman Granite Company signs a $600000 8% 9-month note. The entry made by Hoffman Granite on January 1 to record the proceeds and issuance of the note is a. Interest Expense 36,000 Cash. 564,000 Notes Payable 600,000 b. Cash 600,000 Notes Payable 600,000 c. Cash 600,000 Interest Expense 36,000 Notes Payable 636,000 d. Cash 600,000 Interest Expense 36,000 Notes Payable 600,000 Interest Payable 36,000

Watunga County Bank agrees to lend Hoffman Granite Company $600000 on January 1. Hoffman Granite Company signs a $600000 8% 9-month note. What entry will Hoffman Granite make to pay off the note and interest at maturity assuming that interest has been accrued to September 30? a. Notes Payable. 636,000 Cash 636,000 b. Notes Payable. 600,000 Interest Payable 36,000 Cash 636,000 c. Interest Expense. 36,000 Notes Payable 600,000 Cash 636,000 d. Interest Payable. 24,000 Notes Payable 600,000 Interest Expense 12,000 Cash 636,000

Mary Ehrat an employee of Eddington Company has gross earnings for the month of October of $8000. FICA taxes are 7.65% of gross earnings federal income taxes amount to $1270 for the month state income taxes are 2% of gross earnings and Mary authorizes voluntary deductions of $20 per month to the United Fund. What is the net pay for Mary Ehrat?

A contingent liability should be recorded in the accounts if it is ______________ that the contingency will occur and the amount is ______________.

During December 2016 Apartment Publishing sold 2500 12-month annual magazine subscriptions at a rate of $20 each. The first issues were mailed in February 2017. Prepare the entries on Apartment's books to record the sale of the subscriptions and the mailing of the first issues.

On October 1 Eli's Carpet Service borrows $125000 from First District Bank on a 3-month $125000 8% note. What entry must Eli's Carpet Service make on December 31 before financial statements are prepared? a. Interest Payable 2,500 Interest Expense 2,500 b. Interest Expense 10,000 Interest Payable 10,000 c. Interest Expense 2,500 Interest Payable 2,500 d. Interest Expense 2,500 Notes Payable 2,500

Unearned Rent Revenue is

A debt that is expected to be paid within one year through the creation of long-term debt is a current liability.

Carver's Pharmacy has collected $900 in sales taxes during March. If sales taxes must be remitted to the state government monthly what entry will Carver's Pharmacy make to show the March remittance? a. Sales Taxes Expense 900 Cash 900 b. Sales Tax Payable 900 Cash 900 c. Sales Tax Expense 900 Sales Taxes Payable 900 d. $\text {No entry required.}$

The following totals for the month of June were taken from the payroll register of Parks Company. Salaries and wages \ 80,000 FICA taxes withheld 6,132 Income taxes withheld 17,600 Medical insurance deductions 3,200 Federal unemployment taxes 640 State unemployment taxes 4,000 The entry to record the payment of net payroll would include a

A company whose current liabilities exceed its current assets may have a liquidity problem.

With an interest-bearing note the amount of assets received upon issuance of the note is generally

Fig Company had cash sales of $65100 (including taxes) for the month of June. Sales are subject to 8.5% sales tax. Prepare the entry to record the sale.

FICA taxes and federal income taxes are levied on employees' earnings without limit.

Which one of the following is shown first under current liabilities by many companies as a matter of custom?