ACG2011 Accounting II Chapter 11 Study Guide
On January 10, Chen Co. issued an $80,000, 6%, 90-day note payable to Rao Co. Using a 360-day year, what is the total interest expense of the note?
$1,200.
Employees' weekly gross earnings were $5,500, and their Federal income tax withholding was $1,116.50. Assuming the Social security rate is 6.0% and Medicare tax rate is 1.5%, what is the net amount to be paid to employees?
$3,971.00.
Puzzles Company sells merchandise with a one-year warranty. In 2013, sales consisted of 3,600 units. It is estimated that warranty repairs will average $15 per unit sold, and 40% of the repairs will be made in 2013 and 60% in 2014. In the 2013 income statement, Puzzles Company should show warranty expense of
$54,000.
On January 8, Lowrence Co. issued a $60,000, 120-day discounted note to Raines Bank. The discount rate is 8%. What is the amount of proceeds received?
$58,400
On January 8, Cargo Co. issued a $60,000, 6%, 120-day note payable to Roadside Co. Using a 360-day year, what is the maturity value of the note?
$61,200
The payroll register of Sara Company indicates $5,800 of Social security withheld and $1,450 of Medicare tax withheld on total salaries of $90,000 for the period. Assume earnings subject to State and Federal unemployment compensation taxes are $31,500, at the federal rate of 0.8% and the state rate of 5.4%. What is the total amount of payroll tax expense?
$9,203
Which of the following taxes are not included in the employer's payroll taxes?
Federal income taxes
Parton Company provides its employees with varying amount of vacation per year, depending on the length of employment. The estimated amount of the current year's vacation cost is $196,800. The journal entry to record the adjusting entry required on December 31 to record the current month's accrued vacation pay will include:
a debit to Vacation Pay Expense for $16,400
The following totals for the month of July were taken from the payroll register of Lakeside Company. The journal entry to record the monthly payroll on July 31 would include a
credit to Salaries Payable for $12,150
The journal entry a company uses to record fully funded pension rights for its salaried employees at the end of the year is
debit Pension Expense; credit Cash
The journal entry a company uses to record accrued vacation privileges for its employees at the end of the year is
debit Vacation Pay Expense; credit Vacation Pay Payable.
The following totals for the month of June were taken from the payroll register of Xenos Company: The entry to record the accrual of employer's payroll taxes would include a
debit to Payroll Taxes Expense for $1,360
Estimating and recording product warranty expense in the period of the sale best follows which of the following accounting concepts?
matching concept.
A contingent liability that is probable and the dollar amount can be estimated should be
recorded and disclosed.
Which of the following taxes are employees not subject to?
State Unemployment Tax
