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Exam 11: Current Liabilities and Payroll

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Question 1

Multiple Choice

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Use the following key (a-d) to identify the proper treatment of each contingent liability. -Event is remote and amount is not estimable

A) Record only
B) Record and disclose
C) Disclose only
D) Do not record or disclose

E) A) and C)
F) None of the above

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D

Question 2

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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.)

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Question 3

Multiple Choice

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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

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

A defined contribution plan promises employees a fixed annual pension benefit.

Florida Keys Construction installs swimming pools.It calculates that warranty obligations are 3% of sales.For the year just ending,Florida Keys' sales were $1,450,000.Previous quarterly entries debiting Warranty Expense totaled $28,700.Determine the estimated warranty expense for the year and make the journal entry necessary to bring the account to the needed balance.

The discount on a note payable is charged to an account that has a normal credit balance.

On May 18,Rodriguez Co.issued an $84,000,6%,120-day note payable on an overdue account payable to Wilson Company.Assume that the fiscal year of Rodriguez ends on June 30.Which of the following relationships is true?

Crafter Company has the following assets and liabilities:​​ Determine the quick ratio (rounded to one decimal point) .

Most employers are levied a tax on payrolls for

Journalize the following entries on the books of the borrower and creditor.Label accordingly. (Assume a 360-day year is used for interest calculations.)​​

Current liabilities are

The journal entry used to record the issuance of a discounted note for the purpose of borrowing funds for the business is

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.

Which of the following would be used to compute the federal income taxes to be withheld from an employee's earnings?

An employee receives an hourly rate of $15,with time and a half for all hours worked in excess of 40 during the week.Payroll data for the current week are as follows: hours worked,46; federal income tax withheld,$120; cumulative earnings for the year prior to this week,$5,500; social security tax rate,6.0%; and Medicare tax rate,1.5%; state unemployment compensation tax,3.4% on the first $7,000; federal unemployment compensation tax,0.8% on the first $7,000.Prepare the journal entries to record the salaries expense and the employer payroll tax expense.

Employers are required to compute and report payroll taxes on a calendar-year basis,even if a different fiscal year is used for financial reporting and income tax purposes.

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

The journal entry a company uses to record the estimated product warranty liability expense is

The following information is for employee Ella Dodd for the week ended March 15.Total hours worked: 48Rate: $15 per hour,with double time for all hours in excess of 40Federal income tax withheld: $200United Fund deduction: $50Cumulative earnings prior to current week: $6,400Tax rates:Social security: 6.0% on maximum earnings of $120,000Medicare tax: 1.5% on all earningsState unemployment: 3.4% on maximum earnings of $7,000; on employerFederal unemployment: 0.8% on maximum earnings of $7,000; on employer