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Exam 10: Current Liabilities and Payroll

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Question 61

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

A) debit Cash;credit Accounts Payable
B) debit Accounts,Payable;credit Cash
C) debit Cash;credit Notes Payable
D) debit Accounts Payable;credit Notes Payable

E) B) and D)
F) A) and B)

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Question 62

Multiple Choice

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

A) debit Product Warranty Expense;credit Product Warranty Payable
B) debit Product Warranty Payable;credit Cash
C) debit Product Warranty Expense;credit Cash
D) debit Product Warranty Payable;credit Product Warranty Expense

E) C) and D)
F) A) and D)

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Question 63

Multiple Choice

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

The following totals for the month of February were taken from the payroll register of Arcon Company: How much is the total payroll expense for Arcon Company for this payroll?

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

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. )

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.

Vacation pay payable is reported on the balance sheet as a(n)

Dixon Sales has seven sales employees which receive weekly paychecks.Each earns $10.25 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 of 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. )

Which statement below is not a determinate in calculating the amount of federal income taxes withheld from an individuals pay?

Notes payable may be issued to creditors to satisfy accounts payable created earlier.

The borrower is the one who issues a note payable to a creditor.

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?

For a current liability to exist,the following two tests must be met.The liability must be due usually within a year and must be paid out of current assets.

The following information is for employee Ella Dodd for the week ended March 15. Total hours worked: 48 Rate: $15 per hour,with double time for all hours in excess of 40 Federal income tax withheld: $200 United Fund deduction: $50 Cumulative earnings prior to current week: $6,400 Tax rates: Social security: 6% on maximum earnings of $100,000.Medicare tax: 1.5% on all earnings. State unemployment: 3.4% on maximum earnings of $7,000;on employer Federal unemployment: 0.8% on maximum earnings of $7,000;on employer

Power Company sells merchandise with a one year warranty.In 2012,sales consisted of 1,600 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,Power should show warranty expense of

Payroll entries are made with data from the

Journalize the following,assuming a 360-day year is used for interest calculations:

A loan in which the lender deducts interest from the amount borrowed before the money is advanced to the borrower is called an interest bearing note.

Zennia Company provides its employees with varying amount of vacation per year,depending on the length of employment.The estimated amount of the current year's vacation cost is $135,000.The journal entry to record the adjusting entry required on December 31,the end of the current year,to record the current month's accrued vacation pay is