ACCOUNTING II

Medicare taxes are a required column in a payroll register.

True

Mutual agency means that any partner can legally bind the other partners and the partnership to business contracts within the scope of the​ business's regular operations.

True

State unemployment compensation tax​ (SUTA) is paid by the employer and is not deducted from an​ employee's gross earnings.

True

​David, an employee of​ Cecil, Inc., has gross salary for March of​ $5,900. The entire amount is under the OASDI limit of​ $132,900, and thus subject to FICA. He is also subject to federal income tax at a rate of​ 30%. His year−to−date pay has already exceeded the​ $7,000 cap for FUTA and SUTA. The journal entry to record the​ employer's payroll tax expense includes a credit to FICA−OASDI Taxes Payable for​ $365.80. (Assume a FICA−OASDI Tax of​ 6.2% and FICA−Medicare Tax of​ 1.45%.)

True

Which of the following actions will increase the Common Stock​ account?

stock dividend declared and distributed

In a​ partnership, a person can become a partner by purchasing an existing​ partner's interest.

true

In a​ partnership, mutual agency means that​ ________.

any partner can bind the business to a contract within the scope of its regular business operations

A corporation is a business organized under federal law that is a separate legal entity.

false

A profitable corporation may make distributions to stockholders in the form of bonuses.

false

Accounting for stated value common stock is identical to accounting for par value stock.

false

Capital deficiency occurs when a​ partner's capital account has a credit balance.

false

If a new partner is admitted by giving more cash than he or she received in​ interest, then there will be a bonus to the new partner.

false

In a​ liquidation, when selling assets at a​ gain, the Gain on Disposal of Assets account is debited.

false

In a​ partnership, the income is taxed at the partnership level as well as at the personal level of the owners.

false

Like a sole​ proprietorship's statement of​ owner's equity, the statement of​ partners' equity will show all the​ partners' capital accounts as one account.

false

Manley Corporation issued​ 2,500 shares of its​ $50 par,​ 4% preferred stock on March​ 31, 2025, at​ $80 per share. The amount credited to Paid−In Capital in Excess of Par−Preferred is​ $200,000.

false

Noncumulative preferred stock is in arrears if the dividend has not been paid for the year.

false

Profits and losses in a partnership must be shared based on each​ partner's capital balances.

false

Stock issued at amounts in excess of par value results in a gain that is reported on the income statement.

false

The declaration of a cash dividend does not create an obligation for the corporation.

false

When stock is issued for assets other than​ cash, the transaction is always recorded at the market value of the stock issued.

false

​A(n) ________ must carry large insurance policies to protect the public in case the partnership is found guilty of malpractice.

limited liability partnership

​A(n) ________ does NOT require any permission from the state to be set up.

partnership

If a​ partner's capital account is credited with the amount that he or she contributed in​ cash, which of the following financial statements will be​ affected?

the statement of​ partners' equity

Which of the following is an advantage of a limited liability company compared to a​ partnership?

Unlike a​ partnership, the members of a limited liability company are not personally liable for the​ business's debts.

Paid−in capital consists of​________.

A. amounts received from stockholders in exchange for stock

Edwin and Darren have decided to form a partnership. Edwin contributes​ $82,000 cash and merchandise inventory with a current market value of​ $15,000. Darren contributes​ $2,200 cash and office furniture with a current market value of​ $2,700. When journalizing these transactions​ ________.

Office Furniture will be debited for​ $2,700

​Tan's gross pay for the week is​ $1,900. His year−to−date pay is under the limit for OASDI. Assume that the rate for state and federal unemployment compensation taxes is​ 6% and that​ Tan's year−to−date pay has previously exceeded the​ $7,000 cap. What is the amount of state and federal unemployment tax that his employer must record as payroll tax expense and pay to the federal and state​ governments?

$0

​Tim's gross pay for this month is​ $8,850. His gross year−to−date ​pay, prior to this​ month, totaled​ $127,000. What is the amount of FICA tax withheld from​ Tim's pay for this​ month? (Assume an OASDI rate of​ 6.2%, applicable on the first​ $132,900 earnings, and a Medicare rate of​ 1.45%, applicable on all earnings. Do not round any intermediate​ calculations, and round your final answer to the nearest​ cent.)

$494.13

​Brad's gross pay for the month is $8,400. His deduction for federal income tax is based on a rate of 24​%. He has no voluntary deductions. His year−to−date pay is under the limit for OASDI. What is​ Brad's net​ pay? (Assume a FICA—OASDI Tax of 6.2​% and FICA—Medicare Tax of 1.45​%. Do not round any intermediate​ calculations, and round your final answer to the nearest​ dollar.)

$5,741 Gross Pay $8,400 Less: OASDI 520.8 Less: Medicare 121.8 Less: Federal Income Tax 2,016 Net Pay $5,741.4

Hometown​ Grocery, Inc. has 43,000 shares of common stock outstanding and 3,000 shares of preferred stock outstanding. The common stock is $8 par​ value; the preferred stock is 5​% noncumulative with a $100 par value. On October​ 15, 2024, the company declares a total dividend payment of $48,000. What is the amount of dividend that will be paid for each share of common​ stock? ​(Round your answer to the nearest​ cent.)

3,440.00

Disadvantages of a partnership compared to a sole proprietorship and a corporation

1. Mutual agency and unlimited liability create personal obligations for each partner 2. Partnership agreement may be difficult to formulate 3. Relations among partners may be fragile

Seven items that would need to be incorporated into the written partnership agreement

1. Name, location, and nature of business 2. Name, capital contribution, and duties of each partner 3. Procedures for admitting a new partner 4. Method of sharing profits and losses among the partners 5. Procedures for withdrawal of assets by the partners 6. Procedures for withdrawal of a partner from the partnership 7. Procedures for liquidating the partnership

Advantages of a partnership over a sole proprietorship and a corporation

1. Partnerships bring together the abilities of more than one person 2. Less expensive to organize than a corporation 3. Partners working well together can add more value than by working alone 4. No double taxation of partnerships 5. Partnerships can raise more money than a sole proprietor

​Harry, Tony, and Liza run a partnership firm and share in the profits​ 1:3:2, respectively. In the process of​ liquidation, the partnership sells non−cash ​assets, having a book value of $78,000​, for $93,000. What would be the amount credited to​ Harry's capital account from his share of the gain on sale of​ assets?​ (Do not round intermediary calculations and round the final answer to the nearest whole​ dollar.)

2,500

​Albert, Billy, and Cathy share profits and losses of their partnership in a​ 2:5:3, ratio respectively. If the net income is​ $50,000, calculate​ Billy's share of the profits.​ (Do not round any intermediate calculations. Round the final answer to the nearest​ dollar.)

25,000

Nancy and Betty enter into a partnership agreement where they decide to share profits according to the following​ rules: ​(a) Nancy and Betty will receive salaries of​ $1,600 and​ $11,500 respectively as the first allocation. ​(b) The next allocation is based on​ 20% of each​ partner's capital balances. ​(c) Any remaining profit or loss is to be allocated completely to Betty. The​ partnership's net income for the first year is​ $50,000. Nancy's capital balance is​ $91,000 and​ Betty's capital balance is​ $9,000 at the end of the year. Calculate the share of​ profit/loss to be allocated to Betty.

30,200

The balance sheet of Ryan and​ Peter's partnership as of December​ 31, 2024, is given below. Assets Liabilities Cash $11,000 Accounts Payable ​$15,000 Accounts Receivable 12,000 Other liabilities ​25,000 Furniture 29,000 ​Partners' Equity Equipment 40,000 ​ Ryan, Capital 30,000 Other assets ​8,000 ​ Peter, Capital 30,000 Total assets $100,000 Total liabilities and​ partners' equity $100,000 Ryan and Peter share profits in the ratio​ 3:2. They liquidate the partnership. The furniture and equipment sold at a loss of $57,000. The accounts receivable were collected in full and the other assets were written off as worthless. The cash balance remaining to pay the liabilities is​ ________.

35,000 (just add the liabilities to get this number)

From its inception through the year of​ 2023, First​ Mart, Inc. was profitable and made strong dividend payments each year including all payments to preferred shareholders. In the year​ 2024, First Mart had major losses and paid no dividends. In​ 2025, the company started making large profits​ again, and they were able to pay dividends to all shareholders—both common and preferred. There are 1,500 shares of​ cumulative, 13​% preferred stock outstanding. The preferred stock has a par value of $100. What is the total amount of dividends that should be paid to the preferred stockholders in December​ 2025?

39,000

The following information is from the December​ 31, 2024 balance sheet of Millner Corporation. Preferred​ Stock, $100 par $580,000 Paid−In Capital in Excess of Par—Preferred 45,000 Common​ Stock, $1 par 190,000 Paid−In Capital in Excess of Par—Common 590,000 Retained Earnings 161,500 Total​ Stockholders' Equity $1,566,500 What was the average issue price of the common stock​ shares? ​(Round your answer to the nearest​ cent.)

4.11

Nancy and Peter enter into a partnership and decide to share profits and losses as​ follows: 1. The first allocation is a salary allowance with Nancy receiving $11,000 and Peter receiving $9,000. 2. The second allocation is 15​% of the​ partners' capital balances at year end. On December​ 31, 2025, the capital balances for Nancy and Peter are $82,000 and $23,000​, respectively. 3. Any remaining profit or loss is allocated equally. For the year ending December​ 31, 2025, the partnership reported a net loss of $83,000. What is​ Peter's share of the net​ loss?

46,925

​August, Inc. had the following transactions in​ 2024, its first year of​ operations: • Issued 27,000 shares of common stock. The stock has a par value of $1.00 per share and was issued at $18.00 per share. • Issued 1,300 shares of $170 par value preferred stock at par. • Earned net income of $35,000. • Paid no dividends. At the end of​ 2024, what is total​ stockholders' equity?

742,000

​Valley, Inc. has 11,000 shares of preferred stock outstanding. The preferred stock has a $140 par​ value, a 5​% dividend​ rate, and is noncumulative. If Valley has sufficient funds to pay​ dividends, what is the total amount of dividends that will be paid out to preferred​ stockholders?

77,000

a. The​ long-term debt is payable in annual installments of $42,000​, with the next installment due on July 31. On that​ date, Seal−N−Ship will also pay one​ year's interest at 9%. Interest was paid on July 31 of the preceding year. Make the adjusting entry to accrue interest expense at​ year-end. b. Gross unpaid salaries for the last payroll of the fiscal year were $4,700. Assume that employee income taxes withheld are $910 and that all earnings are subject to OASDI. ​(Round amounts to the nearest​ dollar.) c. Record the associated employer taxes payable for the last payroll of the fiscal​ year, $4,700. Assume that the earnings are not subject to unemployment compensation taxes. d. On February​ 1, the company collected one​ year's rent of $7,200 in advance.

A. Interest Expense 17,325 Interest Payable 17,325 To accrue interest expense at year-end. (Accrued Interest ​($210,000 ​× 9​% ​× 11÷12)​ = $17,325) B. Salaries Expense 4,700 Salaries Payable 3,431 CREDIT FICA-OASDI Taxes Payable 291 CREDIT FICA-Medicare Taxes Payable 68 CREDIT Employee Income Taxes Payable 910 CREDIT To record salaries expense and payroll withholdings. (FICA-OASDI Taxes Payable​ = ​($4,700 ​× 6.2​%) ​= $291 ​ FICA-Medicare Taxes Payable​ = ​($4,700 ​× 1.45​%) ​= $68 Salaries Payable ​($4,700 ​- $910 ​- $291 ​- $68​) ​= $3,431) C. Payroll Tax Expense 359 FICA-OASDI Taxes Payable 291 CREDIT FICA-Medicare Taxes Payable 68 CREDIT To record employer's payroll tax expense. D. Unearned Rent Revenue 3,000 Rent Revenue 3,000 CREDIT To record rent revenue earned at year-end. (Rent Revenue ​($7,200 ​× 5÷12)​ = 3,000)

Shaun and Rick are partners. Shaun has a capital balance of $9,000 and Rick has a capital balance of $7,000. Edwin contributes a building with a current market value of $5,000 to acquire an interest in the new partnership. Which of the following is TRUE of the effect of the transaction on the balance​ sheet? (Assume no bonus to any​ partner.)

Both assets and equity will increase by $5,000.

Floyd and Merriam start a partnership business on June​ 12, 2025. Their capital account balances as of December​ 31, 2026 stood as​ follows: Floyd $31,000 Merriam 20,000 They agreed to admit Ramelow into the business for a one−third interest in the new partnership. Ramelow contributes $24,000 cash in exchange for the partnership interest. Assume that Floyd and Merriam shared profits and losses equally before the admission of Ramelow. Which of the following is the correct journal entry to record the above​ admission?

Cash 24,000 ​Merriam, Capital 500 ​Floyd, Capital 500 ​ CREID Ramelow, Capital 25,000

Corporation has two classes of​ stock: common, ​$3 par​ value; and​ preferred, ​$25 par value. Requirements 1. Journalize California​'s issuance of 4,000 shares of common stock for $11 per share. 2. Journalize California​'s issuance of 4,000 shares of preferred stock for a total of $100,000. Requirement 1. Journalize California​'s issuance of 4,000 shares of common stock for $11 per share. Requirement 2. Journalize California​'s issuance of 4,000 shares of preferred stock for a total of $100,000

Cash 44,000 CREDIT Common Stock—$3 Par Value 12,000 CREDIT Paid-In Capital in Excess of Par—Common 32,000 Issued common stock at a premium. Cash 100,000 CREDIT Preferred Stock—$25 Par Value 100,000 Issued preferred stock at par.

Suppose Price Point Furniture issued 150,000 shares of ​$0.05 par common stock at $5 per share. Which journal entry correctly records the issuance of this​ stock?

Cash 750,000 CREDIT Common Stock—$0.05 Par Value 7,500 CREDIT Paid-In Capital in Excess of Par-Common 742,500

​Harry, Tony, and Liza run a partnership firm and share in the profits​ 1:3:2, respectively. In the process of​ liquidation, the partnership sells non−cash ​assets, having a book value of $82,000​, for $81,000. What would be the journal entry for the sale for cash of the non−cash ​assets?

Cash 81,000 Loss on Disposal 1,000 CREDIT Non−cash Assets

Rodriguez and Ying start a partnership on July​ 1, 2025. Rodriguez contributes​ $4,200 cash, furniture with a current market value of​ $45,000, accounts payable with a current market value of​ $13,000 and equipment with a current market value of​ $25,000. Which of the following is the correct journal entry to record​ Rodriguez's partnership​ investment?

Cash ​4,200 Furniture ​45,000 Equipment ​25,000 CREDIT Accounts Payable ​13,000 ​ CREDIT Rodriguez, Capital ​61,200

Carmel Company earned net income of $105,000 during the year ended December ​31, 2024. On December ​15, Carmel declared the annual cash dividend on its 6​% preferred stock​(par value, $110,000​) and a ​$0.75 per share cash dividend on its common stock (62,000 ​shares). Carmel then paid the dividends on January ​4, 2025. Requirement 1. Journalize for Carmel the entry declaring the cash dividends on December ​15, 2024. Requirement 2. Journalize for Carmel the entry paying the cash dividends on January ​4, 2025.

Cash Dividends 53,100 CREDIT Dividends Payable—Preferred 6,600 CREDIT Dividends Payable—Common 46,500 Declared a cash dividend. Dividends Payable—Preferred 6,600 Dividends Payable—Common 46,500 CREDIT Cash 53,100 Payment of cash dividend.

Anna and Naomi are partners. Anna has a capital balance of $48,000 and Naomi has a capital balance of $40,000. Gary invested $33,000 to acquire an ownership interest of $19,000. Which of the following is TRUE of the partnership journal entry to record the receipt of​ Gary's contribution?​ (Assume the existing partners equally divide the​ bonus.)

Cash is debited for $33,000 and​ Gary, Capital is credited for $19,000

​Hillary, Bruce, and Cindy own a partnership firm. Hillary has an ownership interest of $26,000​; Bruce has an ownership interest of $38,000​; and Cindy has an ownership interest of $29,000. In the process of​ liquidation, the partnership sells non−cash assets and registers a gain of $29,000. The profit−loss sharing agreement is​ 1/6 to​ Hillary; 2/6 to​ Bruce; and​ 3/6 to Cindy. Which of the following is TRUE when a journal entry for the allocation of gain is​ recorded?

Cindy, Capital is credited for $14,500.

Lauren and Elizabeth are partners. Lauren has a capital balance of​ $125,000 and Elizabeth has a capital balance of​ $110,000. Harry invested​ $100,000 to acquire an ownership interest of​ 30%. The journal entry to record the receipt of​ Harry's contribution will​ ________.

D. decrease​ Lauren, Capital

A partnership is a business with two or more owners that is legally organized as a corporation.

False

Gross pay is the total amount of​ salary, wages,​ commissions, and bonuses earned by an employee during a pay​ period, after taxes or any other deductions.

False

The employee federal and state income tax and Social Security tax are optional payroll deductions.

False

Regarding gross and net​ pay, which of the following statements is​ correct?

Gross pay minus all deductions such as income tax withheld equals net pay.

Farrell and Jimmy enter into a partnership agreement on May​ 1, 2024. Farrell contributes​ $30,000 and Jimmy contributes​ $170,000 as their capital contributions. They decide to share profits and losses in the ratio of their respective capital account balances. The net income for the year ended December​ 31, 2024 is​ $40,000. Which of the following is the correct journal entry to record the allocation of​ profit? (Do not round any intermediate calculations. Round your final answers to the nearest​ dollar.)

Income Summary ​40,000 ​Farrell, Capital ​6,000 ​Jimmy, Capital ​34,000

Which of the following is TRUE of a written partnership​ agreement? A

It is a legally−binding agreement between the owners which explains the procedures for liquidating the partnership. Your answer is correct. B. It is an informal agreement between the partners and is not legally binding. C. It is an agreement in which the partners hold a direct agreement with the registration​ body, and the registration body acts as an interlocutor between the partners. D. It is a legally−binding agreement between the proprietors and the stock exchange where it is listed regarding the profit sharing between the owners.

When a previously declared dividend is​ paid, which of the following​ occurs?

Liabilities decrease.

Which of the following statements is​ true?

Neither a stock dividend nor a stock split will result in net gains or losses.

1. Journalize the sale of the​ non-cash assets for $15,000. 2. Journalize the allocation of any gain or loss on the sale of the​ non-cash assets. 3. Journalize the payment of the liabilities. 4. Journalize the payment to the partners.

ONE Cash 15,000 Loss on Disposal 7,000 Non-cash Assets 22,000 CREDIT To record the sale of Non-cash Assets at liquidation. (subtract the non-asset by the sale price given in the description) TWO Murphy, Capital 4,200 Kent, Capital 2,800 Loss on Disposal 7,000 CREDIT To allocate loss on liquidation of Non-cash Assets. THREE Accounts Payable 15,000 Cash 15,000 CREDIT To record the payment of the outstanding liabilities. FOUR Murphy, Capital 4,800 Kent, Capital 5,200 Cash 10,000 CREDIT To distribute remaining cash based on partners' capital balances.

Requirement 1. Journalize the admission of Thomspon as a partner on July 31 if Thomspon pays Loiselle $162,000 cash to purchase Loiselle​'s interest. Requirement 2. Journalize the admission of Thomspon as a partner on July 31 if Thomspon contributes $81,000 to the​ partnership, acquiring a​ 1/4 interest in the business. Requirement 3. Journalize the admission of Thomspon as a partner on July 31 if Thomspon contributes $81,000 to the​ partnership, acquiring a​ 1/6 interest in the business. Requirement 4. Journalize the admission of Thomspon as a partner on July 31 if Thomspon contributes $81,000 to the​ partnership, acquiring a​ 1/3 interest in the business.

ONE Loiselle, Capital 121,500 Thomspon, Capital 121,500 CREDIT To transfer Loiselle's capital to Thomspon. (Use LOISELLES CAPITAL IN THE ENTRY BC ITS LIKE A BOOK BALANCE) TWO Cash 81,000 Thomspon, Capital 81,000 CREDIT To record Thomspon's contribution. THREE Cash 81,000 Thomspon, Capital 54,000 CREDIT Hudson, Capital 5,400 CREDIT Meehan, Capital 6,750 CREDIT Loiselle, Capital 14,850 CREDIT To record Thomspon's contribution and bonus to existing partners. FOUR Cash 81,000 Hudson, Capital 5,400 Meehan, Capital 6,750 Loiselle, Capital 14,850 Thomspon, Capital 108,000 CREDIT To record Thomspon's contribution and bonus.

A​ ________ is a schedule that summarizes the​ earnings, withholdings, and net pay for each employee.

Payroll register

On January​ 1, 2024​, Mackus contributes land in a partnership with Williams. Mackus purchased the land in 2019 for $275,000. A real estate appraiser now values the land at $700,000. Mackus wants $700,000 capital in the new​ partnership, but Williams objects. Williams believes that Mackus's capital contribution should be measured by the book value of his land. Williams and Mackus seek your advice.

Requirement 1. Which value of the land is appropriate for measuring Mackus​'s capital—book value or current market​ value? Mackus​'s capital contribution of land should be valued at CURRENT MARKET VALUE. LAND 700,000 MARKUS, CAPITAL 700,000 TO RECORD MACKUS'S CONTRIBUTION

Sweeney has a capital balance of $24,000​; Sauer​'s balance is $25,000. Howard pays $100,000 to purchase Sauer's interest in the Sweeney ​& Sauer partnership. Sauer receives the full $100,000. Journalize the​ partnership's transaction to admit Howard to the partnership ust Sweeney accept Howard as a full​ partner? What rights does Howard have after purchasing Sauer​'s interest in the​ partnership?

Sauer, Capital 25,000 Howard, Capital 25,000 To record Howard's purchase of Sauer's partnership interest. has the right to refuse to accept Howard into the partnership. After being accepted into the partnership and purchasing the partnership interest of Sauer​, Howard has the full rights of a partner.​ However, Sweeney has to agree to this change.

Journalize the payoff of the​ short-term notes payable from 2023. Journalize the payment of the salaries payable from 2023. Journalize the borrowing of the​ short-term notes payable in 2024 Journalize the accrual of the salaries expense for 2024.

Short-Term Notes Payable 16,000 Cash 16,000 CREDIT To record payment of 2023 notes. Salaries Payable 4,000 Cash 4,000 CREDIT To record payment for salaries payable. Cash 16,900 Short-Term Notes Payable 16,900 CREDIT To record cash borrowed on notes payable. Salaries Expense 3,400 Salaries Payable 3,400 CREDIT To record accrued salaries.

Which of the following is a basic right of​ stockholders?

Stockholders may receive dividends from corporate earnings.

Stone and Smith had beginning capital balances of $18,000 and $13,000​, respectively. The two partners fail to agree on a​ profit-and-loss-sharing ratio. For the first month​ (June 2024​), the partnership has a net loss of $9,000. How much of this loss goes to Stone​? How much goes to Smith​? The partners withdrew no assets during June. What is each​ partner's capital balance at June​ 30? Prepare a​ T-account for each​ partner's capital account. Determine each​ partner's capital balance using these​ T-accounts.

Stone's loss $4,500 Smith's loss $4,500 (9000/2=4500) Stone, Capital 1 debit 18,000 jun 1 2 credit clos (loss) 4,500 3 debit total 13,500 bal smith capital 1 debit 13,000 jun 1 2 crdit clos (loss) 4,500 3 debit 8,500 bal

Jamie Baldwin works at College of Charlotte and is paid $35 per hour for a​40-hour workweek and​time-and-a-half for hours above 40. Requirement 1. Compute Baldwin​'s gross pay for working 44 hours during the first week of February. Requirement 2. Baldwin is​ single, and her income tax withholding is 15% of total pay. Baldwin​'s only payroll deductions are payroll taxes. Compute Baldwin​'s net​ (take-home) pay for the week. Assume Baldwin​'s earnings to date are less than the OASDI limit. Requirement 3. Journalize the accrual of wages expense and the payments related to the employment of Sarah Baldwin. Begin with the entry to accrue wages expense and payroll withholdings for Sarah Baldwin. Now record the entry to record the payment of wages to Sarah Baldwin.

Straight-time pay for 40 hours $1,400.00 Overtime pay for 4 hours 210.00 Gross Pay $1,610.00 Gross pay $1,610.00 Withholding deductions: Employee income tax $241.50 Employee OASDI tax 99.82 Employee Medicare tax 23.35 Total withholdings 364.67 Net (take-home) pay $1,245.33 Wages Expense 1,610.00 Employee Income Taxes Payable 241.50 FICA-OASDI Taxes Payable 99.82 FICA-Medicare Taxes Payable 23.35 Wages Payable 1,245.33 To record wages expense and payroll withholdings. Wages Payable 1,245.33 Cash 1,245.33 To record payment of wages.

Requirement 1. Compute Baldwin​'s gross pay for working 62 hours during the first week of February.

Straight-time pay for 40 hours $2,000.00 Overtime pay for 22 hours 1,650.00 Gross Pay $3,650.00

A corporation has 13,000 shares of 15​%, $107 par noncumulative preferred stock outstanding and 20,000 shares of no−par common stock outstanding. At the end of the current​ year, the corporation declares a dividend of $220,000. What is the dividend per share for preferred stock and for common​ stock? ​(Round your answer to the nearest​ cent.)

The dividend per share is $16.05 to preferred stock and $0.57 to common stock.

Which of the following is true of a​ corporation?

The earnings of a corporation may be subject to double taxation.

Dominic and Morgan are partners. Dominic has a capital balance of​ $370,000 and Morgan has a capital balance of​ $235,000. Morgan sells​ $85,000 of his ownership to Lance. Which of the following is TRUE of the items in the balance​ sheet?

The total equity remains unchanged.

Stone and Thombs are forming a​ partnership, Salem Leather​ Goods, to import merchandise from Spain. Stone is especially artistic and will travel to Spain to buy the merchandise. Thombs is a super salesman and has already lined up several department stores to sell the leather goods. What is the purpose of the partnership​ agreement? If the partnership agreement does not state the​ profit-and-loss-sharing ratios, how will profits or losses be​ shared? Stone is contributing $175,000 in cash and accounts payable of $25,000. Thombs is contributing a building that cost Thombs $65,000. The​building's current market value is $90,000. Journalize the contribution of the two partners. Begin by journalizing Stone​'s investment. Stone is contributing $175,000 in cash and accounts payable of $25,000. Journalize Thombs​' investment. Thombs is contributing a building that cost Thombs $65,000. The​ building's current market value is $90,000.

The purpose of the partnership agreement is to increase the partners' understanding of how the business is run. If the partnership agreement does not state the​ profit-and-loss-sharing ratios, the profits or losses are shared equally. cash 175,000 accounts pay 25,000 CREDIT stone, cap 150,000 CREDIT to record stone's contribution builiding 90,000 thombs, cap 90,000 CREDIT to record thombs' contribution

Aster Corporation recently organized. The company issued common stock to an inventor in exchange for a patent with a market value of $60,000. In​addition, Aster received cash for 6,000 shares of its $10 par preferred stock at par value and 9,500 shares of its​no-par common stock at $40 per share. Without making journal​entries, determine the total​paid-in capital created by these transactions.

The total paid-in capital created by these transactions amounts to $500,000

Which of the following is a disadvantage of partnership​ firms?

They have mutual agency which creates personal obligations for each partner.

Benefits are extra compensation items that are not paid directly to an employee.

True

Employer FICA is paid by the employer and recorded as a payroll tax expense.

True

​________ is a pay amount stated at an hourly rate.

Wage

Dan Jones and Pat Smith are two employees of Lone​ Star, Inc. In January​ 2025, Dan's gross pay was​ $9,000, and​ Pat's gross pay was​ $16,400. All earnings are subject to FICA—OASDI Tax of​ 6.2% and FICA—Medicare Tax of​ 1.45%. Which of the following would be included in the entry to record the payroll tax expense to be paid out by Lone​ Star, Inc. for​ January?

a credit to FICA—Medicare Taxes Payable for​ $368.30

Angie Pereira and Ferro Schwartz are employees of Free​ Star, Inc. In February​ 2025, Angie's gross pay was​ $13,000, and​ Ferro's gross pay was​ $14,900. All earnings are subject to FICA—OASDI Tax of​ 6.2% and FICA—Medicare Tax of​ 1.45%. Which of the following would be included in the entry to record the salaries expense for​ February?

a credit to FICA—OASDI Taxes Payable for​ $1,729.80 13,000 + 14,900 / 6.2%

​O'Malley, Inc. issued 60,000 shares of common stock in exchange for manufacturing equipment. The equipment has a fair value of $1,490,000. The stock has a par value of $0.02 per share. The journal entry to record this transaction includes a​ ________.

credit to Paid−In Capital in Excess of Par—Common for 1,488,800

​Randall, an employee of​ Ramsay's, Inc., has gross salary for March of​ $4,000. The entire amount is under the OASDI limit of​ $132,900 and thus subject to FICA. He is also subject to federal income tax at a rate of​ 18%. Randall has a deduction of​ $320 for health insurance and​ $80 for United Way. Which of the following is included in the entry to record the liabilities for payroll withholding​ deductions?

credit to United Way Payable

Bob and Bill allocate​ 2/3 of their​ partnership's profits and losses to Bob and​ 1/3 to Bill. The net income of the firm is​ $20,000. The journal entry to close the Income Summary will include​ ________. (Do not round any intermediate calculations. Round the final answer to the nearest​ dollar.)

credit to​ Bob, Capital for​ $13,333

Kenny and Jeff form a partnership. During the​ year, Kenny and Jeff withdraw​ $33,000 and​ $22,000, respectively. Which of the following will be included in the journal entry to record the​ withdrawals?

debit to​ Kenny, Withdrawals for​ $33,000

Which characteristic of a corporation is a​ disadvantage?

double taxation

Which of the following is an advantage of the corporate form of​ business?

limited liability of stockholders

Which of the following is paid by the employer​ only?

federal unemployment tax

A general partner in a limited partnership​ ________.

has unlimited personal liability in the partnership

Preferred stockholders​ ________.

receive a dividend preference over common stockholders

The first step in a liquidation is to​ __________.

sell the assets

When an existing partner sells his interest to another party in a personal transaction​ ________.

the journal entry simply debits the withdrawing​ partner's capital account and credits the new​ partner's capital

Which of the following is a reason why many companies require a photo ID when employees pick up their​ paychecks?

to avoid writing a paycheck to a fictitious person

Which of the following is a reason for a company to announce a stock​ split?

to decrease the market price at which the stock is trading

A small stock​ dividend, a large stock dividend and a stock split have no effect on total assets.

true

A stock split decreases par value per​ share, whereas stock dividends do not affect par value per share.

true

Admission of a new partner to a​ partnership, by purchasing an existing​ partner's interest, simply transfers capital from one​ partner's account to another.

true

An S corporation is a corporation with 100 or fewer stockholders that can elect to be taxed as a partnership.

true

Establishing controls for efficiency of the payroll process is one of the main key controls for payroll.

true

Stated value stock is no−par stock that has been assigned an amount similar to par value.

true

Stock dividends have no effect on the total amount of​ stockholders' equity.

true

Stockholders of a corporation are not personally liable for the​ corporation's debt.

true

The declaration date is the date the corporation prepares a journal entry to record that stockholders will receive dividend checks.

true

The issue price is the price the stock initially sells for the first time it is sold.

true

The par value of a stock has no relation to the market value.

true

The process of going out of business by selling the​ entity's assets, paying its​ liabilities, and distributing any remaining cash to the partners based on their equity balances is known as liquidation.

true

The statement of​ partners' equity shows the changes in each​ partner's capital account for a specific period of time.

true

Upon​ liquidation, if there is a sale of assets at a​ loss, the loss must be allocated to the​ partners' capital accounts based on their profit−and−loss−sharing ratio.

true

When a corporation issues no−par ​stock, it debits the asset received and credits the stock account.

true

When a corporation issues stock at par​ value, the Cash account is debited and the Common Stock account is credited for an amount equal to the number of shares issued times the par value per share.

true

When a new partner is admitted at a higher−than−book−value ​contribution, the existing partners will receive a bonus amount.

true

Hank earns​ $18.50 per hour with time−and−a−half for hours in excess of 40 per week. He worked 44 hours at his job during the first week of​ March, 2024. Hank pays income taxes at​ 15% and​ 7.65% for OASDI and Medicare. All of his income is taxable under FICA. Determine​ Hank's net pay for the week.​ (Do not round any intermediate​ calculations, and round your final answer to the nearest​ cent.)

​$658.25 40 x $18.50 = $740 1.5 x $18.50 = $27.75 10 overtime x $27.75 = $277.5 $740 + $277.5 = $1,017.5 income taxes -> $1,017.5 x 7.65% = 77.84 $1,017.5 x 15% = 152.63 $1,017.5 - 77.84 - 152.63 = 787.03

John and Anne are partners. John has a capital balance of​ $48,000 and Anne has a capital balance of​ $35,000. John sells​ $13,000 of his ownership to Bailey. Which of the following is TRUE of the journal entry to admit​ Bailey?

​Bailey, Capital will be credited for​ $13,000.

​Adam, Bill, and Charlie are partners. The profit and loss sharing rule between them is​ 1:4:4, with Bill getting the largest share and Adam receiving the smallest. The partnership incurs a net loss of​ $16,000. While closing the Income Summary​ ________. (Do not round any intermediate​ calculations.)

​Charlie, Capital will be debited for​ $7,111