Hollow Company provides you with following information for two of its employees.The company is subject to the following taxes. \[\begin{array} { | l | l | l | } \hline \text { Tax } & \text { Rate } & \text { Applied To } \\ \hline \text { FICA-Social Security } & 6.20 \% & \text { First } \$ 118,500 \\ \hline \text { FICA-Medicare } & 1.45 \% & \text { All gross pay } \\ \hline \text { FUTA } & 0.60 \% & \text { First } \$ 7,000 \\ \hline \text { SUTA } & 3.20 \% & \text { First } \$ 7,000 \\ \hline \end{array}\] Compute amounts for each of these four taxes as applied to each employee's gross earnings for November. \[\begin{array} { | l | l | } \hline \text { Gross Pay through October } & \text { Gross Pay for November } \\ \hline \text { a. } \$ 6,400 & \$ 2,000 \\ \hline \text { b. } \$ 112,000 & \$ 9,400 \\ \hline \end{array}\]

\[\begin{array} { | l | l | l | l | } \

A) Social Security taxes. B) Medicare taxes. C) Employee income taxes. D) Unemployment taxes. E) Employee deductions. A) Social Security taxes. B) Medicare taxes. C) Employee income taxes. D) Unemployment taxes. E) Employee deductions.

Exam 9: Accounting for Current Liabilities

Accounting for contingent liabilities covers three possibilities: (1)The future event is probable and the amount cannot be reasonably estimated; (2)The future event is remote or unlikely to recur; (3)The likelihood of the liability to occur is impossible.

(True/False)

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Question 41

During June,Vixen Company sells $850,000 in merchandise that has a one year warranty.Experience shows that warranty expenses average about 3% of the selling price.Customers returned $14,000 of merchandise for warranty replacement during the month.The entry to record the estimated warranty provision at the end of the month is:

(Multiple Choice)

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Question 42

A ________ is a potential obligation that depends on a future event arising from a past transaction or event.

(Short Answer)

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Question 43

Hollow Company provides you with following information for two of its employees.The company is subject to the following taxes. Tax Rate Applied To FICA-Social Security 6.20\% First \ 118,500 FICA-Medicare 1.45\% All gross pay FUTA 0.60\% First \ 7,000 SUTA 3.20\% First \ 7,000 Compute amounts for each of these four taxes as applied to each employee's gross earnings for November. Gross Pay through October Gross Pay for November a. \ 6,400 \ 2,000 b. \ 112,000 \ 9,400

(Essay)

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Question 44

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

(Short Answer)

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Question 45

________ are amounts received in advance from customers for future products or services.

(Short Answer)

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Question 46

A company had income before interest expense and income taxes of $186,000,and its interest expense is $55,000.Calculate the company's times interest earned ratio.

(Short Answer)

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Question 47

Match the following items with the appropriate designation (Estimated liability, Contingent liability, or Known liability). -Sales taxes payable

(Multiple Choice)

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Question 48

A high value for the times interest earned ratio means that a company is a lower risk borrower.

(True/False)

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Question 49

On December 1,Victoria Company signed a 90-day,6% note payable,with a face value of $15,000.What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.)

(Multiple Choice)

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Question 50

SaveMart had income before interest expense and income taxes of $12,581 million and interest expense of $1,063 million.Valueland had income before interest expense and income taxes of $3,596 million and interest expense of $1,143 million.Calculate the times interest earned for each company and comment on the results.

(Essay)

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Question 51

Match the following items with the appropriate designation (Estimated liability, Contingent liability, or Known liability). -Unearned revenues

(Multiple Choice)

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Question 52

An employer's federal unemployment taxes (FUTA)are reported:

(Multiple Choice)

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Question 53

During August,Boxer Company sells $356,000 in merchandise that has a one year warranty.Experience shows that warranty expenses average about 5% of the selling price.The warranty liability account has a credit balance of $12,800 before adjustment.Customers returned merchandise for warranty repairs during the month that used $9,400 in parts for repairs.The entry to record the customer warranty repairs is:

(Multiple Choice)

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Question 54

FUTA taxes are:

(Multiple Choice)

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Question 55

A bank that is authorized to accept deposits of amounts payable to the federal government is a:

(Multiple Choice)

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Question 56

During August,Boxer Company sells $356,000 in merchandise that has a one year warranty.Experience shows that warranty expenses average about 5% of the selling price.The warranty liability account has a credit balance of $12,800 before adjustment.Customers returned merchandise for warranty repairs during the month that used $9,400 in parts for repairs.The entry to record the estimated warranty expense for the month is:

(Multiple Choice)

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Question 57

The Wage and Tax Statement given to each employee annually is:

(Multiple Choice)

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Question 58

The chief executive officer earns $20,000 per month.As of May 31,her gross pay was $100,000.The tax rate for Social Security is 6.2% of the first $118,500 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings.The current FUTA tax rate is 0.6%,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 FICA-Social Security withheld from this employee for the month of June?

(Multiple Choice)

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Question 59

Contingent liabilities are recorded or disclosed unless they are:

(Multiple Choice)

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Question 60

Showing 41 - 60 of 258

Accounting for contingent liabilities covers three possibilities: (1)The future event is probable and the amount cannot be reasonably estimated; (2)The future event is remote or unlikely to recur; (3)The likelihood of the liability to occur is impossible.

A ________ is a potential obligation that depends on a future event arising from a past transaction or event.

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

________ are amounts received in advance from customers for future products or services.

A company had income before interest expense and income taxes of $186,000,and its interest expense is $55,000.Calculate the company's times interest earned ratio.

Match the following items with the appropriate designation (Estimated liability, Contingent liability, or Known liability). -Sales taxes payable

A high value for the times interest earned ratio means that a company is a lower risk borrower.

On December 1,Victoria Company signed a 90-day,6% note payable,with a face value of $15,000.What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.)

Match the following items with the appropriate designation (Estimated liability, Contingent liability, or Known liability). -Unearned revenues

An employer's federal unemployment taxes (FUTA)are reported:

FUTA taxes are:

A bank that is authorized to accept deposits of amounts payable to the federal government is a:

The Wage and Tax Statement given to each employee annually is:

Contingent liabilities are recorded or disclosed unless they are:

Accounting in Business

Analyzing for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash, fraud, and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Investments

Partnership Accounting

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