Exam 9: Accounting for Current Liabilities and Payroll

Moreno Company began 2016 with a balance of $300 in Sales Tax payable.During the year,the company recorded taxable sales of $92,500.The ending balance in Sales Tax payable was $445 Moreno's sales tax rate is 4%. a)How much sales tax did Moreno collect during 2016? b)How much sales tax did Moreno pay during 2016?

The post-closing trial balance of Chester Company at December 31,2016 is as follows: Required: 1)Use the trial balance of Chester Company to prepare the current assets and current liabilities sections of Chester's balance sheet at December 31,2016. 2)Calculate the current ratio at December 31,2016.Show all calculations and round the ratio to two decimal places.

Use the following to answer questions The following information is taken from the balance sheet of Menendez Company on January 1,2016: -On January 2,2016,the company recorded the following transaction: Recording this transaction will:

Independent contractors must be individuals who are employed by another company.

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.Enter only one letter for each element. -Joseph Company issued a one-year,6% note to Community Bank.

The Wage and Tax Statement,Form W-2,is sent to the employee annually to report earnings and withheld taxes.

Based on this information alone,the amount of total liabilities appearing on Madison's 2016 balance sheet would be:

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.Enter only one letter for each element. -On April 1,2017,Jenkins Company repaid a $20,000,one-year,6% note and interest to Community Bank.Interest on the note had been accrued on December 31,2016.

Indicate whether each of the following statements is true or false. _____ a)The amount of federal tax withheld from an employee's salary depends on the employee's gross pay and the number of withholding allowances the employee claims. _____ b)Withheld taxes are recorded in the payroll tax expense account. _____ c)An employer will submit $8,250 in FICA taxes for an employee who earns $55,000 annually. _____ d)A voluntary deduction,such as a charitable contribution,creates a liability when it is withheld from employee pay. _____ e)If an employer records gross pay of $2,400 and withholds $700 of that amount,then the employer will recognize $1,700 in salary expense.

Indicate whether each of the following statements is true or false. _____ a)The extension of a warranty on goods sold normally represents a legal liability to the seller. _____ b)The entry to recognize the warranty obligation increases the Warranties Payable account and reduces the Revenue account. _____ c)The entry to record the repairs provided to customers under the terms of product warranties increase Warranties Expense and decrease the Warranties Payable account. _____ d)Net income is not affected by the entry to record the completion of warranty work. _____ e)Total assets are not affected by the end-of-period entry to record the warranty obligation.

The term used to describe the ability to generate short-term cash flows is:

Employers must withhold unemployment taxes from employee salaries.

Hartford Company borrowed $20,000 on October 1,2016.Hartford issued a one year 6% discount note payable.The adjusting entry necessary to record accrued interest on December 31,2016 would include a:

Which of the following items would be least likely to appear in the current liabilities section of a classified balance sheet?

Contingent liabilities are only recognized if they arise from past events.

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.Enter only one letter for each element. -Ping Company made its remittance to the state sales tax authority.

If a company offers a warranty on the products it sells,the company records the warranty expense at the time that service is provided to customers under the terms of the warranty.

Use the following to answer questions The Baltimore Company issued a $9,000 face value discount note to Bank of the Chesapeake on March 1,2016.The note carried a 5% discount rate and a one-year term to maturity. -How would the adjusting entry to record interest expense on December 31,2016 affect the financial statements?

Benitez Co.had sales of $800,000 in 2016.The company expects to incur warranty expenses amounting to 3% of sales.There were $13,000 of warranty obligations paid in cash during 2016.Based on this information:

Vogle Company purchased $8,000 of equipment by making a $500 down payment and issuing a note for the remainder.As a result of this event,assets increased by $8,000.