Exam 10: Liabilities: Current, Installment Notes, and Contingencies

Federal unemployment compensation taxes that are collected by the federal government are not paid directly to the unemployed but are allocated among the states for use in state programs.

Lee Company has the following information for the pay period of December 15-31: Gross payroll \ 16,000 Federal income tax withheld \ 4,000 Social security rate 6\% Federal unemployment tax rate 0.8\% Medicare rate 1.5\% State unemployment tax rate 5.4\% Assuming no employees are subject to ceilings for taxes on their earnings, Salaries Payable would be recorded for

Which of the following is the most desirable quick ratio?

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

The journal entry a company uses to record fully funded pension rights for its salaried employees at the end of the year is

Aqua Construction installs swimming pools. It calculates that warranty obligations are 5% of sales. For the year just ending, Aqua's sales were $1,500,000. Previous quarterly entries debiting Product Warranty Expense totaled $48,700. Determine the estimated warranty expense for the year and make the journal entry necessary to bring the account to the needed balance.

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 amount of money a borrower receives from the lender is called the discount rate.

A borrower has two alternatives for a loan: (a) issue a $480,000, 60-day, 8% note or (2) issue a $480,000, 60-day note that the creditor discounts at 8%. (Assume a 360-day year is used for interest calculations.) (a) Calculate the amount of the interest expense for each option. (b) Determine the proceeds received by the borrower in each situation.

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?

During the first year of operations, a company granted warranties on its products at an estimated cost of $8,500. The product warranty expense should be recorded in the years of the expenditures to repair the products covered by the warranty payments.

​If a company borrows money from a bank as an installment note, the interest portion of each annual payment will

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? When required, round your answer to the nearest dollar.

According to a summary of the payroll of Scotland Company, $450,000 was subject to the 6.0% social security tax and $500,000 was subject to the 1.5% Medicare tax. Federal income tax withheld was $98,000. Also, $15,000 was subject to state (5.4%) and federal (0.8%) unemployment taxes. The journal entry to record accrued payroll taxes would include a

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

On January 1, Yeargan Company obtained a $125,000, 7-year 5% installment note from Farmers Bank. The note requires annual payments of $21,602, with the first payment occurring on the last day of the fiscal year. The first payment consists of $6,250 interest and principal repayment of $15,352. ​ Journalize the following entries: (a) Issued the installment note for cash on January 1. (b) Paid the first annual payment on the note. ​

On June 8, Smith Technologies issued a $75,000, 6%, 140-day note payable to Johnson Company. What is the due date of the note?

​The journal entry a company uses to record pension rights that have not been funded for its salaried employees at the end of the year is