Exam 9: Reporting and Analyzing Current Liabilities

A liability is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events.

A company's fixed interest expense is $8,000, its income before interest expense and income taxes is $32,000. Its net income is $9,600. The company's times interest earned ratio equals:

The rate that a state assigns reflecting a company's stability or instability in employing workers is the:

On September 1, Knack Company signed a $50,000, 90-day, 5% note payable with Central Savings Bank. What is the journal entry that should be recorded by Knack upon maturity of the note?

Which of the following do not apply to unearned revenues?

Floral Depot's income before interest expense and income taxes was $5,900 million, and interest expense was $38 million. Calculate Floral Depot's times interest earned.

Classify each of the following items as either: A.Estimated liability B.Contingent liability C.Known liability

The amount of federal income tax withheld from employee pay depends on the employee's annual earnings rate and the number of withholding allowances claimed by the employee.

Triston Vale is paid on a monthly basis. For the month of January of the current year, he earned a total of $5,210. FICA tax for Social Security is 6.2% on the first $118,500 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings. The FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $885.70. What is the amount of the employer's payroll taxes expenses for this employee?

Estimated liabilities commonly arise from all of the following except:

A table that shows the amount of federal income tax to be withheld from an employee's pay is the:

The payroll records of a company provided the following data for the weekly pay period ended December 7: The FICA social security tax rate is 6.2% on the first $118,500 of earnings each calendar year and the FICA Medicare tax rate is 1.45% on all earnings. The federal and state unemployment tax rates are 0.8% and 5.4%, respectively, on the first $7,000 paid to each employee. Prepare the journal entries to (a) accrue the payroll and (b) record payroll taxes expense.

An employee earned $62,500 during the year working for an employer. The FICA tax rate for Social Security is 6.2% of the first $118,500 of employee earnings per calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. What is the amount of total unemployment taxes the employee must pay?

Santa Barbara Express has 4 sales employees, each of whom earns $5,000 per month and is paid on the last working day of the month. Each employee's wages are subject to FICA social security taxes of 6.2% of the first $118,500 of earnings each calendar year and Medicare taxes of 1.45% of all earnings. Withholding for each employee also includes federal income tax of 16% and monthly medical insurance premiums of $110 for each employee. a. Prepare the general journal entry to accrue the monthly sales salaries expense at January 31. b. The employer payroll taxes for Santa Barbara Express include FICA taxes, federal unemployment taxes of 0.6% of the first $7,000 paid each employee, and state unemployment taxes of 4.0% of the first $7,000 paid to each employee. Prepare the journal entry to record the employer's payroll taxes at January 31 for Santa Barbara Express. (Assume that none of the employees has reached the unemployment limit of $7,000.)

On April 12, Hong Company agrees to accept a 60-day, 10%, $4,500 note from Indigo Company to extend the due date on an overdue account. What is the journal entry needed to record the payment of the note by Indigo Company on the maturity date?

Contingent liabilities are recorded or disclosed unless they are:

An employer's federal unemployment taxes (FUTA) are reported:

All of the following statements related to recording warranty expense are true except:

Define liabilities and explain the difference between current and long-term liabilities.

Identify and discuss the factors involved in computing federal income taxes withheld from employees.