Exam 11: Current Liabilities and Payroll

Which of the following accounts will be credited by the borrower when a promissory note is issued?

On April 1,2017,Planet Services received $14,200 in advance of performing the services from a customer for three months of service - April,May and June.What would be the journal entry to adjust the accounts at the end of May? (Do not round any intermediate calculations,and round your final answer to the nearest dollar. )

Lawrence,an employee of Light,Inc. ,has gross salary for March of $4,000.The entire amount is under the OASDI limit of $117,000,and thus subject to FICA.His year-to-date pay has already exceeded the $7,000 cap for FUTA and SUTA.Which of the following is a part of the journal entry to record the employer's payroll taxes?

Which of the following is an example of an estimable probable contingency?

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

A contingency was evaluated at year-end and considered to have a remote possibility of becoming an actual liability.If this was not reported on the balance sheet or in the notes to the financial statements,what effect would this have on the financial reporting of the company?

What is a contingent liability? Provide two examples of contingencies.

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

Only contingencies that are probable and can be estimated are recorded as a liability and an accrued expense.

Extra compensation items that are not paid directly to an employee are called ________.

Short-term notes payable represent a written promise by the business to pay a debt,without the addition of interest,within one year or less.

Rosewood,Inc.recently signed a $356,000,six-month note on August 22,2017.The interest rate is 12.5%.How much interest will be due at maturity?

Amounts owed for products or services purchased on account are accounts receivable.

Which of the following is pay over and above base salary,usually paid for exceptional performance?

State unemployment compensation tax (SUTA)is paid by the employer and is not deducted from an employee's gross earnings.

On December 31,2016,Circle,Inc.borrowed $500,000 by signing a five-year,8% note payable.The note is payable in five yearly installments of $100,000 plus interest,due at the end of every year beginning on December 31,2017.Which portion is classified as the long-term portion of Notes Payable at December 31,2016?

Bespoke,Inc.offers warranties on all their bikes.They estimate warranty expense at 4.5% of sales.At the beginning of 2017,the Estimated Warranty Payable account had a credit balance of $1,200.During the year,Bespoke had $305,000 in sales and had to pay out $5,700 in warranty payments.At the end of the year,what is the closing balance in the Estimated Warranty Payable accounts?

McBride Industries completed the following transactions during 2016: Journalize the transactions (explanations are not required).Round to the nearest dollar.

Leroy,an employee of Double Time,Inc. ,has gross salary for March of $4,000.The entire amount is under the OASDI limit of $117,000 and thus subject to FICA.He is also subject to federal income tax at a rate of 18%.Provide the journal entry to record salaries expense and payroll withholdings.(Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%. )

Tom's gross pay for the month is $3,400.Tom's deduction for federal income tax is based on a rate of 22%.Tom has no voluntary deductions.Tom's yearly pay is under the limit for OASDI.What is the amount of FICA tax withheld from Tom's pay? (Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.Do not round any intermediate calculations,and round your final answer to the nearest cent. )