Exam 9: Reporting and Analyzing Current Liabilities

The amount of federal income tax withheld is based on the employee's annual earnings rate plus the number of withholding allowances claimed by the employee.

Employers are required to pay state and federal payroll taxes.

Mission Company has three employees: -What is the amount that Mission Company will withhold from Clark's August gross pay?

A company sells personal computers,with an included two-year warranty for $2,300 each.During the current year,the company sells 400 computers.On the basis of past experience,the warranty costs are estimated to be $250 per computer.The actual warranty costs (paid in cash) by the company during the current year were $65,000.Prepare general journal entries to record the (a) estimated warranty expense and (b) warranty repair costs during current year.

The Appleton Company borrowed $100,000 on May 1,2014.The note,which is due on May 31,2015,included interest at 12%.The note is due on April 30,2015.The company's fiscal year ends on May 31.The company recorded an adjusting entry to recognize $1,000 of interest expense for the year ended May 31,2014.Appleton paid the note and interest owed on April 30,2015.How would the company record this transaction?

The deferred income tax liability:

The Orlando Magic received $6 million cash in advance season ticket sales.Prior to the beginning of the basketball season,these sales are recorded as a credit to unearned season ticket revenue.

A high merit rating means that an employer has high employee turnover or seasonal hiring.

A company had a fixed interest expense of $6,000,its income before interest expense and any income taxes was $18,000 and its net income was $8,400.The company's times interest earned ratio is equal to

Miller Company has a times interest earned ratio of 5.Sales and variable expenses were $57,290 and $40,105 respectively.Compute the company's fixed interest expense.

____________________________ are banks authorized to accept deposits of amounts payable to the federal government,including amounts due for payroll taxes.

For the year ended December 31,2013,Mason Company has implemented an employee bonus program equal to 7% of Mason's net income,which employees will share equally.Mason's net income (pre-bonus) is expected to be $3,500,000,and bonus expense is deducted in computing net income.What is the amount that needs to be recorded for estimated bonus liability for 2013?

The current FUTA tax rate is 0.8% and the SUTA tax rate is 5.4%.Both taxes are applied to the first $7,000 of an employee's pay.Assume that an employee earned $8,900.What is the amount of total unemployment taxes the employer must pay on this employee's wages?

If a company paid $820,000 in bonuses,and net income before bonus was $3,850,000,what was the bonus percentage offered to the employees during this year?

When companies pay the government collected sales tax,sales taxes payable is credited and cash is debited.

A payroll register is a cumulative record of an employee's hours worked,gross earnings,deductions,and net pay.

Which of the following is a true statement regarding the treatment of accounts payable,sales tax payable,and unearned revenues?

The payroll records of a company provided the following data for the currently weekly pay period ended March 7: Assume that the Social Security portion of the FICA taxes is 6.2% on the first $110,100 (for 2012) and the Medicare portion is 1.45% of all wages paid to each employee for this pay period.The federal and state unemployment tax rates are 0.8% and 5.4%,respectively,on the first $7,000 paid to each employee. Calculate the net pay for each employee.

Contingent liabilities are recorded if the future event is _______________ and the amount owed can be _______________.

Mission Company has three employees: -What are Mission Company's total August payroll taxes for Smith?