Accounting 250 Exam 3 Ch 8, 9, 11
An employee has year-to-date earnings of $114,700. The employee's gross pay for the next pay period is $2,800. If the FICA—OASDI is 6.2% and the wage base is $117,000, how much FICA—OASDI tax will be withheld from the employee's pay? (Answer is rounded to whole dollar.)
$143 taxable portion remaining=(117,000-114,700)=2,300 FICA--OASDI withheld= (2,300*.062)=143
Brickman Company uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts had a credit balance of $1,000. During the year Brickman wrote off uncollectible receivables of $2,100. Brickman recorded Bad Debts Expense of $2,700. Brickman's year-end balance in Allowance for Bad Debts is $1,600. Brickman's ending balance of Accounts Receivable is $19,500. Compute the net realizable value of Accounts Receivable at year-end.
17,900 19,500-1,600=17,900
B Corporation uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts had a credit balance of $1,200. During the year B wrote off uncollectible receivables of $2,000. B recorded Bad Debts Expense of $3,500. What is B's year-end balance in Allowance for Bad Debts?
2,700 (1,200-2,000+3,500)
(RERE) owed Estimated Warranty Payable of $1,200 at the end of 2015. During 2016, RERE made sales of$120,000 and expects product warranties to cost the company 3% of the sales. During 2016, RERE paid $2,300 for warranties. What is RERE's Estimated Warranty Payable at the end of 2016?
3,300 120,000*.04=4800 1,100+4,800-2,600=3,300
At year-end, Slippery has cash of $19,000, current accounts receivable of $120,000, merchandise inventory of $26,000, and prepaid expenses totaling $4,000. Liabilities of $40,000 must be paid next year. Assume accounts receivable had a beginning balance of $40,000 and net credit sales for the current year totaled $960,000. How many days did it take Slippery to collect its average level of receivables? (Assume 365 days/year. Round any interim calculations to two decimal places. Round the number of days to the nearest whole number.)
30 Average accounts receivable= ((120,000 + 40,000)/2)=80,000 Accounts receivable turnover ratio= (960,000/80,000)=12 Days sales in receivables= (365/12)= 30
On August 10, Swanson Company recorded sales of merchandise inventory on account, $4,000. The sales were subject to sales tax of 4%. The company uses the perpetual inventory system. On September 30, Swanson paid $500 of sales tax to the state.
Acc rec D-4160 sales rev c-4000 sales tax payable c-160 to record sales of merchandise inventory and the related sales tax
Jade owes $20,000 on a truck purchased for use in the business. Assume the company makes timely principal payments of $5,00 each year at December 31 plus interest at 8%. Which of the following is true : After the first payment is made, the company owes $15,000 plus three years' interest. After the first payment, $15,000 would be shown as a long-term liability. After the first payment is made, $5,000 would be shown as the current portion due on the long-term note. Just before the last payment is made, $5,000 will appear as a long-term liability on the balance sheet.
After the first payment is made, $5,000 would be shown as the current portion due on the long-term note.
he employer is responsible for which of the following payroll taxes? 1.451.45% FICAl—Medicare tax 6.2% FICA—OASDI tax Federal and state unemployment taxes All of the above
All of the above
Which intangible asset is recorded only as part of the acquisition of another company? Goodwill Patent Franchise Copyright
Goodwill
At December 31 year-end, Club Corporation has a $9,500 note receivable from a customer. Interest of 12% has accrued for 9 months on the note. What will Club's income statement for the year ended December 31 report for this situation?
Interest revenue of $855
Swell Company has a lawsuit pending from a customer claiming damages of $100,000. Swell's attorney advises that the likelihood the customer will win is remote. GAAP requires at a minimum that this contingent liability be
No disclosure is required.
copy machine cost $48,000 when new and has accumulated depreciation of $39,000. Suppose Copy Center sold the machine for $9,000. What is the result of this disposal transaction?
No gain or loss
A company sells $190,000 of goods and collects sales tax of 3%. What current liability does the sale create?
Sales tax payable of $5,700
At December 31 year-end, Club Corporation has a$10,000 note receivable from a customer. Interest of 6% has accrued for 3 months on the note. What will Club's financial statements report for this situation?
The balance sheet will report the note receivable of 10,000 and interest receivable of 150. interest receivable= 10,000 * .06*3/12
At December 31 year-end, Cotton Corporation has a $9,500 note receivable from a customer. Interest of 12% has accrued for 2 months on the note. What will Cotton's financial statements report for this situation?
The balance sheet will report the note receivable of 9,500 and interest receivable of 190 interest receivable= 9,500*.12*2/12
Which of the following is a limitation of the direct write-off method of accounting for uncollectibles?
The direct write-off method does not match expenses against revenue very well. The direct write-off method overstates assets on the balance sheet. The direct write-off method does not set up an allowance for uncollectibles.
Tanner Corporation expects to pay a 4% bonus on net income after deducting the bonus. Assume the corporation reports net income of $126,880 before the calculation of the bonus. The journal entry to record the accrued bonus includes
a credit to employee bonus 4,880 (126,880*.04)/(1+.04)
Vega Corporation expects to pay a 4% bonus on net income after deducting the bonus. Assume the corporation reports net income of$130,000 before the calculation of the bonus. The journal entry to record the accrued bonus includes
a credit to employee bonus 5,000 (130,000*.04)/1.04
Trevor Corporation expects to pay a 3% bonus on net income after deducting the bonus. Assume the corporation reports net income of $152,440 before the calculation of the bonus. The journal entry to record the accrued bonus includes
a credit to employee bonus payble 4,440 (152,440*.03)/.03
When recording credit card or debit card sales using the net method...
cash received equals sales minus the fee assessed by the card processing company.
On January 1, 2016, a business borrowed $17,000 on a five-year, 6% note payable. At December 31, 2016, the business should record..
interest payable of 1,020
Which method is used to compute depletion? Double-declining-balance method Straight-line method Units-of-production method Depletion method
Units-of-production method
