Accounting exam 5

How to calculate shares outstanding

# Shares issued - Treasury Stock

Martin Jackson receives an hourly wage rate of $30, with time and a half for all hours worked in excess of 40 hours during the week. Payroll data for the current week are as follows: Hours work, 46; Federal income tax withheld, $350: Social Security tax rate, 6.0%; and Medicare tax rate, 1.5%. What is the net amount being paid to Jackson

$1009.75 Earnings regular rate (30 x 40) 1200 Earnings overtime rate [46-40 =6(30x 1.5)] 270 1470 SS TAX RATE (1470 x 6/100) 88.2 MEDICARE TAX RATE (1470 x 1.5/100) 22.05 Federal withholding 350 460.25 1470 - 460.25 = 1009.75

Thomas Martin receives an hourly wage rate of $40, with time and a half for all hours worked in excess of 40 hours during the week. Payroll data for the current week or as follows: hours worked, 48; Federal income tax withheld, $350; social Security tax rate, 6.0%; and Medicare tax rate, 1.5%. What is the gross pay for Martin

$2080 Earnings at regular rate (40 x 40) 1600 Earnings at overtime rate( 8(40 x 1.5)) 480 1600 + 480 = 2080

Nebraska Inc. Issues 3000 shares of common stock for $45,000. The stock has a stated value of $10 per share. The journal entry to record stock issuance would include a credit to Common stock for

$30000

Assuming a 360 day year, when a $50,000, 90 day, 9% interest-bearing payable matures, total payment will be

$51,125 (50000 + 1125) 50000 x 9/100 x 90/360 = 1125

How to calculate stock splits

(# of shares x given) x (par per share / given)

A corporation has 50,000 shares of $25 par stock outstanding. If the corporation issues at three for one stock split, the number of shares outstanding after the split will be

150,000 shares (50000 x 3)

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 30000 shares were originally issued and 5000 and were subsequently reacquired . What is the number of shares outstanding

25,000 (30000 - 5000) = 25000

Current liability

Amounts due to be paid to creditors within 12 months

The state charter allows a Corporation to issue only a certain number of shares of each class of stock. This amount of stock is called

Authorized stock

Taylor bank lends guarantee company $150,000 on January 1. Guarantee company signs $150,000, 8% , nine-month note. The entry made by Guarantee company on January 1 to record the proceeds of issuance of the note is

Cash $150,000 Notes Payable. $150,000

JE to issue stock

Cash ( # of shares x price) Common Stock. ( # of shares x Par value) Paid in Capital in excess of par (difference)

Which of the following is not a characteristic of a corporation

Cash dividends paid by a corporation are deductible as expenses by the corporation

What accounts are included in stockholders equity

Common Stock Preferred Stock Treasury stock (Paid in capital in excess of par Retained earnings)

W4

Completed by employee to indicate his or her tax situation to the employer

The journal entry to record the issuance of a note for the purpose of converting an existing account payable would be

Debit Accounts Payable; Credit notes payable

The journal entry used to record issuance of an interest bearing note for the purpose of borrowing funds for the business is

Debit cash: Credit notes payable

The journal entry to record the payment of an interest-bearing no news

Debit notes payable and interest expense: credit cash

Martinez Co. Borrowed $50000 on March 1 of the current year for signing a 60 day, 9% interest bearing note. Assuming it 360 day year, where the note is paid on April 30, the entry to record the payment should include a

Debit to interest expense for $750

Cash dividends (3 dates and JE)

Declaration date Cash dividends Cash dividends payable Record date - no JE Payment date Cash dividends bailable Cash

All of the following are normally found in a corporation stockholders equity section except

Dividends in arrears

Disadvantage of corporate form of business

Double Taxation of dividends, Costs, Documentation

Which of the following taxes are employers required to withhold from employees

FICA tax

Outstanding Shares

Referred to a company stock currently held by all its shareholders including share blocks held by investors and restricted shares owned by the companies officers and insiders

Taxes paid by employees (withheld)

SS - FICA FIT Medicare

Characteristics of corporations

Shareholders who have a limited liability

Treasury stock

Stock that a corporation has issued and then reacquired

What is treasury stock on balance sheet

Stockholders equity section

Par value

The monetary value assigned per-share in the corporate charter

Issue Shares

The quantity of shares of the corporation which have been allocated and are subsequently held by shareholders

Employee gross pay

The total earnings of employee for a payroll period

W2

The total wages paid to an employee and taxes withheld during calendar year

A current liability is a debt that is reasonably expected to be paid

Within one year

How to calculate maturity value

notes payable + interest expense (I) I = Price x Rate (#/100) x Time (#/360)

Net pay

the amount the employer is obligated to pay the employee