Exam 11: Current Liabilities and Payroll

Depending upon when an unfunded pension liability is to be paid, it will be classified on the balance sheet as either a long-term or a current liability.

The current assets and current liabilities for Kolbie Company and Newton Company are shown as follows at the end of 2012. *These represent prepaid expenses and other non-quick current assets. Required: (1) Determine the quick ratio for both companies. Round to two decimal places. (2) Interpret the quick ratio difference between the two companies.

Martin Services Company provides their employees vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $39,500 for the period. The pension plan requires a contribution to the plan administrator equal to 9% of employee salaries. Salaries were $750,000 during the period. Provide the journal entry for (a.) the vacation pay and (b.) the pension benefit.

Another name for the quick ratio is

The amount of federal income taxes withheld from an employee's gross pay is recorded as a(n)

Journalize the following transactions:

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

Payroll entries are made with data from the

During its first year of operations, a company granted employees vacation privileges and pension rights estimated at a cost of $21,500 and $15,000. The vacations are expected to be taken in the next year and the pension rights are expected to be paid in the future 5-30 years. What is the total cost of vacation pay and pension rights to be recognized in the first year?

For paying their payroll, most employers use payroll checks drawn on a special bank account.

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

The employee earnings record would contain which column that the payroll register would probably not contain?

List five internal controls that relate directly to payroll.

The journal entry a company uses to record partially funded pension rights for its salaried employees, at the end of the year is

A current liability is a debt that is reasonably expected to be paid

For Company A and Company B:

The summary of the payroll for the monthly pay period ending July 15 indicated the following: Journalize the entries to record (a) the payroll and (b) the employer's payroll tax expense for the month. The state unemployment tax rate is 3.1%, and the federal unemployment tax rate is 0.8%. Only $25,000 of salaries are subject to unemployment taxes.

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

For which of the following taxes is there no ceiling on the amount of employee annual earnings subject to the tax?

Excel Products Inc. pays its employees semimonthly. The summary of the payroll for December 31, 2012 indicated the following: For the year ended 2012, $40,000 of the December 31 payroll is subject to social security tax of 6%; $120,000 is subject to Medicare tax of 1.5%; $10,000 is subject to state unemployment tax of 4.3% and federal unemployment tax of 0.8%. As of January 1, 2013 all of the $120,000 is subject to all payroll taxes. Present the journal entries for payroll tax expense if the employees are paid (a) December 31 of the current year, (b) January 2 of the following year.