Exam 9: Reporting and Analyzing Current Liabilities

The rate for FICA Social Security is 6.2% and the rate for FICA Medicare is 1.45%.Calculate the total amount of FICA withholding for an employee whose pay is $2,400 and is entirely subject to these FICA taxes.

A company estimates that warranty expense will be 4% of sales.The company's sales for the current period are $185,000.The current period's entry to record the warranty expense is:

A corporation has a $42,000 credit balance in the Income Tax Payable account.Period-end information shows that the actual liability is $50,000.The company should record an entry to debit Income Tax Expense for $8,000 and credit Income Taxes Payable for $8,000.

Employee vacation benefits:

Employer payroll taxes are an added employee _______________ beyond the wages and salaries earned by the employees.

Unearned revenues are listed on the balance sheet under liabilities.

Explain how to calculate times interest earned and how this ratio is used to analyze a company.

Unearned revenue is initially recognized with a:

On September 15,Sports World borrowed $75,000 cash from First Bank on a 12%,60-day note payable. a.Prepare Sports World's general journal entry to record the issuance of the note payable. b.Prepare Sports World's general journal entry to record the payment of the note at maturity assuming no adjusting entries have been made since the note was first issued.

A company's income before interest expense and income taxes was $395,000 in 2013 and $427,000 in 2014.Its fixed interest expense was $125,000 for both years.Calculate the company's times interest earned ratio and comment on its level of risk.

If the times interest ratio:

Employers must keep certain payroll records,including individual earnings reports for each employee.

__________ allowances are items that reduce the amount of federal income taxes owed by the individual.