Question 1

Chang Co.issued a $50,000,120-day,discounted note to Guarantee Bank.The discount rate is 6%.Assuming a 360-day year,the cash proceeds to Chang Co.are

Accepted Answer

A)   $49,750
B)   $47,000
C)   $49,000
D)   $51,000E) A) and B)
F) None of the above

Question 2

Lamar Industries warrants its products for one year.The estimated product warranty expense is 3% of sales.Sales for June were $190,000.In July,a customer received warranty repairs requiring $185 of parts and $50 of labor.

Accepted Answer

The answer of Lamar Industries warrants its products for one...

Question 3

Payroll taxes only include social security taxes and federal unemployment and state unemployment taxes.

Accepted Answer

A) True 
 B)False

Question 4

Townson Company had gross wages of $180,000 during the week ended December 10.All earnings are subject to social security tax,while the amount of wages subject to federal and state unemployment taxes was $24,000.Tax rates are as follows:
The total amount withheld from employee wages for federal income taxes was $32,000.

Accepted Answer

The answer of Townson Company had gross wages of $180,000...

Question 5

The amount borrowed is equal to the face amount of the note on an interest-bearing note payable.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)   debit Salary Expense; credit Cash
B)   debit Pension Expense; credit Unfunded Pension Liability
C)   debit Pension Expense; credit Unfunded Pension Liability and Cash
D)   debit Pension Expense; credit CashE) A) and B)
F) C) and D)

Question 7

​On January 1,Gemstone Company obtained a $165,000,10-year,7% installment note from Guarantee Bank.The note requires annual payments of $23,492,with the first payment occurring on the last day of the fiscal year.The first payment consists of interest of $11,550 and principal repayment of $11,942.The journal entry to record the payment of the first annual amount due on the note would include a

Accepted Answer

A)   ​debit to cash for $11,942
B)   ​credit to interest payable for $11,550
C)   ​debit to notes payable for $11,942
D)   ​debit to interest expense for $23,492E) A) and B)
F) A) and C)

Question 8

The journal entry to record the conversion of a $6,300 accounts payable to a note payable would be ​

Accepted Answer

A)   Cash 6,300Notes Payable 6,300​
B)   Notes Receivable 6,300Notes Payable 6,300​
C)   Notes Payable 6,300Cash 6,300​
D)   Accounts Payable 6,300Notes Payable 6,300E) All of the above
F) B) and D)

Question 9

Use the following key (a-d) to identify the proper treatment of each contingent liability.
-Event is remote and amount is estimable

Accepted Answer

A)  Record only
B)  Record and disclose
C)  Disclose only
D)  Do not record or disclose E) All of the above
F) None of the above

Question 10

Use the following key (a-d) to identify the proper treatment of each contingent liability.
-Event is probable and amount is estimable

Accepted Answer

A)  Record only
B)  Record and disclose
C)  Disclose only
D)  Do not record or disclose E) A) and B)
F) None of the above

Question 11

The proceeds from discounting a $20,000,60-day,note payable at 6% is $20,200.

Accepted Answer

A) True 
 B)False

Question 12

​On January 1,Zero Company obtained a $52,000,4-year,6.5% installment note from Regional Bank.The note requires annual payments consisting of principal and interest of $15,179,beginning on December 31 of the current year.The December 31,Year 1 carrying amount in the allocation of periodic payments table for this installment note will be equal to:

Accepted Answer

A)   ​$27,635
B)   ​$40,201
C)   ​$36,821
D)   ​$39,000E) B) and D)
F) All of the above

Question 13

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

Accepted Answer

A)   ​debit to Payroll Tax Expense for $1,170
B)   ​debit to FICA Taxes Payable for $1,500
C)   ​credit to Payroll Tax Expense for $420
D)   ​debit to Payroll Tax Expense for $1,620E) None of the above
F) All of the above

Question 14

In order to be a recorded contingent liability,the liability must be possible and easily estimated.

Accepted Answer

A) True 
 B)False

Question 15

Federal unemployment taxes are paid by the employer and the employee.

Accepted Answer

A) True 
 B)False

Question 16

According to a summary of the payroll of Scotland Company,salaries for the period were $500,000.Federal income tax withheld was $98,000.Also,$15,000 was subject to state (4.2%)and federal (0.8%)unemployment taxes.All earnings are subject to social security tax of 6.0% and Medicare tax of 1.5%.
​

Accepted Answer

The answer of According to a summary of the payroll...

Question 17

The payroll register of Seaside Architecture Company indicates $970 of social security and $257 of Medicare tax withheld on total salaries of $16,500 for the period.Federal withholding for the period totaled $4,235.Prepare the journal entry for the period's payroll.

Accepted Answer

The answer of The payroll register of Seaside Architecture Company...

Question 18

Martinez Co.borrowed $50,000 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

Accepted Answer

A)   debit to Interest Payable for $750
B)   debit to Interest Expense for $750
C)   credit to Cash for $50,000
D)   credit to Cash for $54,500E) All of the above
F) A) and B)

Question 19

On July 8,Jones Inc.issued an $80,000,6%,120-day note payable to Miller Company.Assume that the fiscal year of Jones ends July 31.Using a 360-day year,what is the amount of interest expense recognized by Jones in the current fiscal year? When required,round your answer to the nearest dollar.

Accepted Answer

A)   $700
B)   $4,200
C)   $307
D)   $1,400E) B) and D)
F) A) and C)

Question 20

Assuming that all wages are subject to federal and state unemployment taxes,the employer's payroll tax expense would be

Accepted Answer

A)   $1,370
B)   $750
C)   $620
D)   $2,870E) A) and B)
F) None of the above

Exam 10: Liabilities: Current,installment Notes,and Contingencies

The payroll register of Seaside Architecture Company indicates $970 of social security and $257 of Medicare tax withheld on total salaries of $16,500 for the period.Federal withholding for the period totaled $4,235.Prepare the journal entry for the period's payroll.

Correct Answer
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In order to be a recorded contingent liability,the liability must be possible and easily estimated.

Correct Answer
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Correct Answer
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Lamar Industries warrants its products for one year.The estimated product warranty expense is 3% of sales.Sales for June were $190,000.In July,a customer received warranty repairs requiring $185 of parts and $50 of labor.

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

Correct Answer
verified

The journal entry to record the conversion of a $6,300 accounts payable to a note payable would be

Correct Answer
verified

The proceeds from discounting a $20,000,60-day,note payable at 6% is $20,200.

Correct Answer
verified

Correct Answer
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Assuming that all wages are subject to federal and state unemployment taxes,the employer's payroll tax expense would be

Correct Answer
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Martinez Co.borrowed $50,000 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

Correct Answer
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Chang Co.issued a $50,000,120-day,discounted note to Guarantee Bank.The discount rate is 6%.Assuming a 360-day year,the cash proceeds to Chang Co.are

Correct Answer
verified

Payroll taxes only include social security taxes and federal unemployment and state unemployment taxes.

Correct Answer
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Federal unemployment taxes are paid by the employer and the employee.

Correct Answer
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Use the following key (a-d) to identify the proper treatment of each contingent liability. -Event is probable and amount is estimable

Correct Answer
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According to a summary of the payroll of Scotland Company,salaries for the period were $500,000.Federal income tax withheld was $98,000.Also,$15,000 was subject to state (4.2%)and federal (0.8%)unemployment taxes.All earnings are subject to social security tax of 6.0% and Medicare tax of 1.5%.

Correct Answer
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On July 8,Jones Inc.issued an $80,000,6%,120-day note payable to Miller Company.Assume that the fiscal year of Jones ends July 31.Using a 360-day year,what is the amount of interest expense recognized by Jones in the current fiscal year? When required,round your answer to the nearest dollar.

Correct Answer
verified

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

Correct Answer
verified

The amount borrowed is equal to the face amount of the note on an interest-bearing note payable.

Correct Answer
verified

Use the following key (a-d) to identify the proper treatment of each contingent liability. -Event is remote and amount is estimable

Correct Answer
verified

Exam 10: Liabilities: Current,installment Notes,and Contingencies

The payroll register of Seaside Architecture Company indicates $970 of social security and $257 of Medicare tax withheld on total salaries of $16,500 for the period.Federal withholding for the period totaled $4,235.Prepare the journal entry for the period's payroll.

Correct AnswerverifiedShow Answer

In order to be a recorded contingent liability,the liability must be possible and easily estimated.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Lamar Industries warrants its products for one year.The estimated product warranty expense is 3% of sales.Sales for June were $190,000.In July,a customer received warranty repairs requiring $185 of parts and $50 of labor.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The journal entry to record the conversion of a $6,300 accounts payable to a note payable would be ​

Correct AnswerverifiedShow Answer

The proceeds from discounting a $20,000,60-day,note payable at 6% is $20,200.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assuming that all wages are subject to federal and state unemployment taxes,the employer's payroll tax expense would be

Correct AnswerverifiedShow Answer

Martinez Co.borrowed $50,000 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

Correct AnswerverifiedShow Answer

Chang Co.issued a $50,000,120-day,discounted note to Guarantee Bank.The discount rate is 6%.Assuming a 360-day year,the cash proceeds to Chang Co.are

Correct AnswerverifiedShow Answer

Payroll taxes only include social security taxes and federal unemployment and state unemployment taxes.

Correct AnswerverifiedShow Answer

Federal unemployment taxes are paid by the employer and the employee.

Correct AnswerverifiedShow Answer

Use the following key (a-d) to identify the proper treatment of each contingent liability. -Event is probable and amount is estimable

Correct AnswerverifiedShow Answer

According to a summary of the payroll of Scotland Company,salaries for the period were $500,000.Federal income tax withheld was $98,000.Also,$15,000 was subject to state (4.2%)and federal (0.8%)unemployment taxes.All earnings are subject to social security tax of 6.0% and Medicare tax of 1.5%. ​

Correct AnswerverifiedShow Answer

On July 8,Jones Inc.issued an $80,000,6%,120-day note payable to Miller Company.Assume that the fiscal year of Jones ends July 31.Using a 360-day year,what is the amount of interest expense recognized by Jones in the current fiscal year? When required,round your answer to the nearest dollar.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The amount borrowed is equal to the face amount of the note on an interest-bearing note payable.

Correct AnswerverifiedShow Answer

Use the following key (a-d) to identify the proper treatment of each contingent liability. -Event is remote and amount is estimable

Correct AnswerverifiedShow Answer

Correct Answer
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The journal entry to record the conversion of a $6,300 accounts payable to a note payable would be

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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According to a summary of the payroll of Scotland Company,salaries for the period were $500,000.Federal income tax withheld was $98,000.Also,$15,000 was subject to state (4.2%)and federal (0.8%)unemployment taxes.All earnings are subject to social security tax of 6.0% and Medicare tax of 1.5%.

Correct Answer
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Correct Answer
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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

Correct Answer
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Correct Answer
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Correct Answer
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