Exam 11: Current Liabilities and Payroll Accounting

Employees earn vacation pay at the rate of one day per month.During July,25 employees qualify for one vacation day each.Their average daily wage is $100 per day.What is the amount of vacation benefit expense to be recorded for the month of July?

An estimated liability is a known obligation of an uncertain amount that can at least be reasonably estimated.

Calco had income before interest expense and income taxes of $5,698 million and interest expense of $399 million.Calculate Calco's times interest earned.

An employee earned $47,000 during the year working for an employer.The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%.The employee's annual FICA taxes amount is:

Matt and Bryan Walls of SnorgTees stress the importance of managing liabilities.What are some of the liabilities that the brothers discovered they would have to manage to be successful?

A company's income before interest expense and income taxes is $302,400,and its interest expense is $72,000.Calculate the company's times interest earned ratio.

Uncertainties from the development of new competing products are contingent liabilities.

A payroll register includes:

Times interest earned is computed by dividing _______________ by interest expense.

An employee earned $62,500 during the year working for an employer.The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%.The current FUTA tax rate is 0.8%,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 total unemployment taxes the employee must pay?

Ember Co.entered into the following transactions involving short-term notes payable. On June 18,Ember purchased $25,000 merchandise from Halco Co.,terms are 2/10,n/30.Halco uses the perpetual inventory system.On July 19,Ember replaced the June 18 account payable with a 60-day,$22,000 note bearing 9% annual in addition to paying $3,000 in cash. ______ Paid the amount due on the note at maturity. 1.Determine the maturity date for the note. 2.Prepare journal entries for all the preceding transactions and events.

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

A company's income before interest expense and income taxes in 2010 and 2011 is $395,000 and $427,000,respectively.Its fixed interest expense was $125,000 for both years.Calculate the company's times interest earned ratio,and comment on its level of risk.

The wage bracket withholding table is used to:

Times interest earned is calculated by:

The Form W-2 must be given to employees before January 31 following the year covered by the Form W-2.

A payroll register is a cumulative record of an employee's hours worked,gross earnings,deductions,and net pay.

A merit rating:

A company borrowed $60,000 by signing a 60-day,10% note payable from its bank.Compute the total cash payment due on the note's maturity date.

A company's payroll information for the month of May follows: On May 31 the company issued Check No.335 payable to the Payroll Bank Account to pay for the May payroll.It issued payroll checks to the employees after depositing the check. (1)Prepare the journal entry to record (accrue)the employer's payroll for May. (2)Prepare the journal entry to record payment of the May payroll.The federal and state unemployment tax rates are 0.8% and 5.4%,respectively,on the first $7,000 paid to each employee.The wages and salaries subject to these taxes were $6,000. (3)Prepare the journal entry to record the employer's payroll taxes.