Exam 11: Current Liabilities and Payroll

The information related to Outloud Music,Inc.is given below: Calculate the times-interest-earned ratio for each year and also state the percentage change in the ratio.

Steve is an employee of Panache,Inc.Panache pays a portion of his health insurance premium and also contributes to a retirement plan in his name.The company's share of the health insurance premium is $660,and the company's contribution to the retirement plan is $820.The journal entry to record the employee benefits to be paid by the company should include a debit to Employee Health Insurance Payable for $1,480.

Cambridge Sales,Inc.has gross salaries and wages for March of $45,000.Provide the journal entry to record salaries and wages expense and payroll withholdings.(Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%. )Salaries and wages to date are under the OASDI limit.Assume no federal or state income taxes are due.

Which of the following correctly describes the accounting treatment for interest payable?

A $46,000,four-month,7% note payable was issued on October 1,2017.Which of the following would be included in the journal entry required on the note's maturity date by the borrower? (Do not round any intermediate calculations,and round your final answer to the nearest dollar. )

Which of the following is true of a contingent liability?

Gene's gross pay for the week is $1,300.His yearly pay is under the limit for OASDI.Assume that the rate for state and federal unemployment compensation taxes is 6% and that Gene's year-to-date pay has previously exceeded the $7,000 cap.His yearly pay is under the limit for OASDI.What is the total amount of payroll taxes that Gene's 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%. )

Dana Appliances sells dishwashers with a four-year warranty.In 2017,sales revenue for dishwashers is $90,000.The company estimates warranty expense at 4.5% of revenues.What is the 2017 warranty expense? (Round your final answer to the nearest dollar. )

Felix Sales,Inc.offers warranties on all its electronic goods.Warranty expense is estimated at 3.5% of sales revenue.In 2017,Felix had sales of $333,000.In the same year,Felix replaced defective goods with merchandise inventory costing $8,750.Prepare the journal entry to record the warranty expense.

In regards to corporate income tax,which of the following statements is incorrect?

The following transactions of Windsor Enterprises occurred in 2016 and 2017: Journalize the transactions in Windsor's general journal.Explanations are not required.Round to the nearest dollar.

The times-interest-earned ratios of Benin,Inc.are 20.56 and 7.35 for 2016 and 2017,respectively.Which of the following can be the possible reason for such a change?

If the likelihood of a future event is reasonably possible,how should the company report the contingency?

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.Prepare the journal entry to accrue employee bonus expense.

Which of the following is included in the entry to record estimated warranty payable?

Gem Corp.had cash sales of $10,000.The state sales tax rate is 9.8%.What amount is debited to the Cash account?

Which of the following is a reason why many companies require a photo ID when employees pick up their paychecks?

Warranty Expense is shown on the income statement at the estimated amount.

Dan Jones and Pat Smith are two employees of Lone Star,Inc.In January 2017,Dan's gross pay was $10,500,and Pat's gross pay was $10,900.All earnings are subject to FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.Which of the following would be included in the entry to record the payroll tax expense to be paid out by Lone Star,Inc.for January?

Which of the following statements about the times-interest-earned ratio is true?