Exam 10: Current Liabilities and Payroll

The current assets and current liabilities for Kolbie Company and Newton Company are as follows: *These represent prepaid expenses and other non-quick current assets. a) Determine the quick ratio for both companies. Round to two decimal places. b) Interpret the quick ratio difference between the two companies.

The cost of a product warranty should be included as an expense in the

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

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

On June 8, Williams Company issued an $80,000, 5%, 120-day note payable to Brown Industries. Assuming a 360- day year, what is the maturity value of the note?

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%; 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.

The current portion of long-term debt should

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

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

Hadley Industries warrants its products for one year. The estimated product warranty expense is 4% of sales. Assume that sales were $210,000 for June. In July, a customer received warranty repairs requiring $205 of parts and $75 of labor. a) Journalize the adjusting entry required at June 30, the end of the first month of the current year, to record the estimated product warranty expense. b) Journalize the entry to record the warranty work provided in July.

Taylor Bank lends Guarantee Company $150,000 on January 1. Guarantee Company signs a $150,000, 8%, 9- month note. The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the note is

Based on the following data, what is the quick ratio, rounded to one decimal point? Accounts payable 30,000 Accounts receivable 60,000 Accrued liabilities 5,000 Cash 30,000 Intangible assets 50,000 Inventory 69,000 Long-term investments 80,000 Long-term liabilities 100,000 Marketable securities 30,000 Fixed assets 670,000 Prepaid expenses 1,000

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

Payroll taxes levied against employers become an employer liability at the time the employee wages are incurred.

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.)Aug. 1 Winston Co. purchased merchandise for $75,000 on account from Bagley Co., terms n/30. Sept. 1 Winston Co. issued a 90-day, 6% note for $75,000 on account. Nov. 30 Winston Co. paid the amount due.

Notes may be issued

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

Federal income taxes are subject to a maximum amount per employee per year.

Which of the following forms is typically given to employees at the end of the calendar year so that employees can file their individual income tax forms?

On June 1, Davis Inc. issued an $84,000, 5%, 120-day note payable to Garcia Company. Assume that the fiscal year of Garcia ends June 30. Using the 360-day year, what is the amount of interest revenue recognized by Garcia in the following year?