Exam 11: Current Liabilities and Payroll

A $40,000, four-month, 6.5% note payable was issued on October 1, 2015. Which of the following would be included in the journal entry required on the note's maturity date by the borrower?

Victoria Sales made total cash sales in February of $666,000, and they are subject to 7.5% sales tax. Please provide the summary entry to record sales revenues and sales tax payable.

Rocco worked 43 hours at his job during the first week of March, 2015. He is paid $14.5 per hour and receives overtime at the rate of time-and-one-half for hours worked over forty. What is Rocco's gross pay for the week?

Paramount Inc. decided to reward its employees with a bonus of 7% on annual net income, after deducting the bonus. The company reported net income of $513,600 before the calculation of the bonus. Provide the journal entry to accrue employee bonus expense.

Taurus's gross pay for the week is $980. His yearly pay is under the limit for OASDI. Assume that the rate for state and federal unemployment compensation taxes is 6.2%, and that Taurus's pay year-to-date has not yet exceeded the $7,000 cap. His yearly pay is under the limit for OASDI. How much is the total amount of payroll taxes that his employer must record as payroll tax expenses? (Do not round your intermediate calculations. Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.)

Berkley's gross pay for the week is $780. Berkley's yearly pay is under the limit for OASDI. Assume that the rate for state and federal unemployment compensation taxes is 6.2%, and that Berkley's pay year-to-date has not yet exceeded the $7,000 cap. How much is the amount of state and federal unemployment tax that his employer must record as payroll tax expense and pay to the federal and state governments?

Which of the following columns is included in a typical payroll register?

Isabelle's gross pay for the week is $850. Her deduction for federal income tax is based on a rate of 19%. She has voluntary deductions of $135. Her yearly pay is under the limit for OASDI. What is the amount of FICA-Medicare Tax deducted from her pay? (Assume a FICA-OASDI Tax of 4.2% and FICA-Medicare Tax of 1.45%.)

FICA tax is paid by the employee only and is deducted from gross pay.

Art Panache, the sole employee of Panache Sales, has gross salary for May of $6,000. The entire amount is under the OASDI limit of $110,100, and thus subject to FICA. He is also subject to federal income tax at a rate of 20%. Which of the following is a part of the journal entry to record the disbursement of his net pay? (Assume a FICA-OASDI Tax of 4.2% and FICA-Medicare Tax of 1.45%.)

Which of the following accounts is credited by the seller when tax is collected on retail sales?

A certain contingent liability was evaluated at year-end, and considered to have a remote possibility of becoming an actual liability. If the accountant decided not to report it on the balance sheet or in the notes to the financial statements, this could be considered a violation of generally accepted accounting principles.

Art Panache, the sole employee of Panache Sales, has gross salary for March of $5,000. The entire amount is under the OASDI limit of $110,100, and thus subject to FICA. He is also subject to federal income tax at a rate of 20%. His year-to-date pay has already exceeded the $7,000 cap for FUTA and SUTA. The journal entry in the payroll cycle to record employer's payroll tax expense includes a credit to FICA-Medicare Taxes Payable for $145. (Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.)

Net pay is the total amount of compensation that the employee takes home, after the deductions are made.

Which of the following is a major control risk in the payroll area?

The times-interest-earned ratio is also called the short interest ratio.

Warranties pose an accounting challenge because a company does not know which or how many products will have to be repaired.

If a long-term liability is paid in installments, the maker will report the current portion of the note payable as a current liability.

Parrish Sales withholds $720 from Art Parrish's paycheck for federal income tax. This amount is part of the company's payroll tax expense.

The information related to interest expense of Stereo Music is given below: Based on the above data, which of the following is the interest coverage ratio?