Exam 10: Current Liabilities and Payroll

On August 1, Batson Company issued a 60-day note with a face amount of $140,000 to Jergens Company for merchandise inventory. (Assume a 360-day year is used for interest calculations.)

The detailed record indicating the data for each employee for each payroll period and the cumulative total earnings for each employee is called the

Form W-2 is called the Wage and Tax Statement.

Receiving payment prior to delivering goods or services causes a current liability to be incurred.

The proceeds of a discounted note are equal to the face value of the note.

FICA tax is a payroll tax that is paid only by employers.

The journal entry a company uses to record the issuance of a note for the purpose of converting an existing account payable would be

On June 8, Alton Co. issued an $90,000, 6%, 120-day note payable to Seller Co. Assuming a 360-day year for your calculations, what is the maturity value of the note?

A business borrowed $40,000 on March 1 of the current year by signing a 60-day, 9% interest bearing note. Assuming a 360-day year, when the note is paid on April 30, the entry to record the payment should include a

The following totals for the month of June were taken from the payroll register of Arcon Company: The entry to record the payment of net pay would include a

The journal entry a company uses to record the payment of a discounted note is

On June 8, Alton Co. issued an $80,000, 6%, 120-day note payable to Seller Co. Assume that the fiscal year of Seller Co. ends June 30. Using the 360-day year in your calculations, what is the amount of interest revenue recognized by Seller in the following year?

Current liabilities are

Carmen Flores' weekly gross earnings for the week ending Dec. 7th were $2,500, and her federal income tax withholding was $525. Prior to this week Flores had earned $98,000 for the year. Assuming the social security rate is 6% on the first $100,000 of annual earnings and Medicare is 1.5% of all earnings, what is Flores' net pay?

If, prior to the last weekly payroll period of the calendar year, the cumulative earnings for an employee are $98,800, earnings subject to social security tax are $100,000, and the tax rate is 6.0%, the employer's social security tax on the $2,000 gross earnings paid on the last day of the year is $120.

Which of the following is the most desirable quick ratio?

The journal entry to record the conversion of an $4,700 accounts payable to a notes payable would be:

Journalize the following entries on the books of Winston Co. for August 1, September 1, and November 30. (Assume a 360-day year is used for interest calculations.)

Most employers are levied a tax on payrolls for

Research Company sells merchandise with a one year warranty. In 2012, sales consisted of 2,500 units. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in 2012 and 70% in 2013. In the 2012 income statement, Research should show warranty expense of