Exam 11: Current Liabilities and Payroll

On October 30, Seba Salon, Inc. issued a 90-day note with a face amount of $60,000 to Reyes Products, Inc. for merchandise inventory. Assuming a 360-day year, determine the proceeds of the note assuming the note is discounted at 8%.

Which of the following is the most desirable quick ratio?

On June 8, Alton Co. issued an $80,000, 6%, 120-day note payable on an overdue account payable to Seller Co. Assume that the fiscal year of Alton Co. ends June 30. Which of the following relationships is true?

One of the more popular defined contribution plans is the 401k plan.

John Woods' weekly gross earnings for the present week were $2,500. Woods has two exemptions. Using $80 value for each exemption, what is Woods' federal income tax withholding?

The total net pay for a period is determined from the payroll register.

Mobile Sales has five sales employees which receive weekly paychecks. Each earns $11.50 per hour and each has worked 40 hours in the pay period. Each employee pays 12% of gross in Federal Income Tax, 3% in State Income Tax, 6% of gross in Social Security Tax, 1.5% of gross in Medicare Tax, and 1/2% in State Disability Insurance. Journalize the recognition the pay period ending January 19th which will be paid to the employees January 26th. (Keep in mind that none of the employees is subject to a ceiling amount for social security.)

During September, Excom sold 100 radios for $50 each. Each radio cost Excom $30 to purchase, and carried a two-year warranty. If 5% of the goods sold typically need to be replaced over the warranty period and one is actually replaced during September, for what amount in September would Excom debit Product Warranty Expense?

An employee receives an hourly rate of $30, with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: hours worked, 48; federal income tax withheld, $300; cumulative earnings for year prior to current week, $90,700; social security tax rate, 6.0% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings. What is the net amount to be paid to the employee?

An employee's take home pay is equal to gross pay less all voluntary deductions.

An employee receives an hourly rate of $40, with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $350; cumulative earnings for year prior to current week, $99,700; social security tax rate, 6.0% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings. What is the gross pay for the employee?

FICA tax becomes a liability to the federal government at the time an employee's payroll is prepared.

The journal entry a company uses to record pension rights that have not been funded for its salaried employees, at the end of the year is

All long-term liabilities eventually become current liabilities.

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

Journalize the following transactions for Riley Corporation:

Use the following information to answer the following questions. The following totals for the month of April were taken from the payroll register of Magnum Company. The entry to record accrual of employer's payroll taxes would include a

The payroll register is a multicolumn form used to assemble the data related for all employees.

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

Federal unemployment compensation tax becomes an employer's liability at the time the employee is paid.