HM 235 final

If the employee has $800 withheld from their check for federal income tax, what is the amount that the employer would need to pay for their portion of the federal income tax?

$0

Robert purchased a truck for $60,000 with a life expectancy of 5 years; using straight-line depreciation, the amount of the depreciation adjustment for each month would be:

$1,000

An employee has gross earnings of $1,200 with withholdings of 6.2% FICA-OASDI, 1.45% FICA-Medicare, $50 for federal income tax and $10 for state income tax. How much is the net pay?

$1,048.20

Determine the adjusted bank balance for Sam's Packaging on November 30, from the following information: Cash balance on the bank statement$3,350Customer's check returned - NSF 500 Customer's note collected by the bank600Deposits in transit, November 301,400Outstanding checks, November 303,650

$1,100

Bob Stein's hourly wage is $45.00, and he worked 42 hours during the week. Assuming an overtime rate of time and a half over 40 hours, Bob's gross pay is:

$1,935

Equipment with a cost of $150,000 has an accumulated depreciation of $50,000. What is the book value of the equipment?

$100,000

Strawberry Supreme purchased new baking equipment for $17,000 subject to a discount of 3%. The discount was taken. Additional costs included sales tax $700, installation of $500 and insurance for the first year of $1,000. The total cost to be added to the equipment account is:

$17,690

Harvest Moon Company has total assets of $20,000. If $2,000 cash is used to purchase a new computer, the total assets would be:

$20,000.

Robert purchased a truck for $30,000 with a life expectancy of 5 years; using straight-line depreciation, what would the book value of the truck be at the end of the first year?

$24,000

At the end of 2018, Net Income on the income statement for the Badger Inn was $75,000 while Net Income for 2017 was $100,000. The year-over-year decrease for net income was:

$25,000 and 25%

Nittany Company purchased a machine at an invoice cost of $25,000 subject to a discount of 3%. The discount was taken. Additional costs were installation of $1000, freight of $500 and insurance on the machine after it was placed in operation of $500. The total cost to be captialized to the machinery account is:

$25,750

If total assets are $50,000 and total liabilities are $22,000, Capital must equal:

$28,000.

Calculate, from the following information accumulated by Bob Clark, the adjusted book cash balance at the end of April. Bank statement ending cash balance$3,000General ledger cash balance ending4,250Bank monthly service charge45Deposits in transit2,500Outstanding checks1,500NSF check returned with bank statement205

$4,000

Bob Love earned $126,400 prior to the payroll period ending June 15. For the current payroll, Bob Love earned $5,000 and has the following deductions: FICA-OASDI (with a limit of $128,400), FICA-Medicare; federal income tax of $300; and state income tax $40. What is his net pay?

$4,463.50

Accounts Receivable had a normal starting balance of $4,500. There were debit postings of $1,800 and credit postings of $1,600 during the month. The ending balance of the account is:

$4,700 debit.

Accounts Payable had a normal starting balance of $500. There were debit postings of $200 and credit postings of $100 during the month. The ending balance is:

$400 credit.

Vanessa's Gymnastics' cash register tapes do not agree with cash receipts. The facts are: total cash register tapes $400; total coins and currency $404. The summary journal entry to record the day's transactions would include a:

$404 debit to Cash; $4 credit to Cash Short and Over; and $400 credit to Service Revenue

Retained Earnings for 2017 equaled $650,500 whereas 2018's balance equaled $605,200. Net Income for 2018 equaled $450,000. How much in Dividends was paid out in 2018?

$495,300.

What would the book value be at the end of year 6 for a piece of equipment using the straight-line method when cost is $11,000, residual value is $1,000, and the expected life is 10 years?

$5,000

Carmen's Restaurant Net Income was $45,000 and Depreciation Expense was $5,000. Other accounts that changed: Accounts Receivable increased by $14,000; Inventory decreased by $20,000; Accounts Payable increased by $8,000; and Salaries Payable decreased by $3,000. The amount of Net Cash Flow from Operating Activities is:

$61,000.

The May bank statement for legal services shows a balance of $6,000, but the book balance shows a cash balance of $7,680. Other information includes: 1. A check for $200 to pay the electric bill was recorded on the books as $20 2. Included on the bank statement was a note collected by the bank for $400 plus interest of $30 3. Checks outstanding totaled $260 4. Bank service charges were $50 5. Deposits in transit were $2,140 The adjusted cash balance at the end of May should be: Correct!

$7,880

Dave Brown's cumulative earnings are $127,200, and his gross pay for the week is $5,300. If the FICA rates are: Social Security 6.2% and Medicare is 1.45%, what are his FICA-OASDI and FICA-Medicare taxes for the week? Assume the Social Security threshhold is $128,400.

$74.40; $76.85

Lacy purchased equipment for $76,000 on January 1. Its residual value is $4,000 with a useful life of 8 years. The amount of depreciation expense each year under the straight-line method is:

$9,000

What would the book value be at the end of year 5 for a piece of equipment using the straight-line method when cost is $16,000, residual value is $2,000, and the expected life is 10 years?

$9,000

If beginning and ending inventories are $175,000 and $125,000, respectively, and the cost of goods sold for the month (30 Days) is $450,000, what is the number of days in inventory ratio?

10.00

Iconic Brands has a beginning Accounts Receivable balance of $225,000 and an ending balance of $175,000. Net credit sales are $400,000 for the month of June (30 Days). The company's average collection period or Days Sales Outstanding is:

15 days

The current ratio for a company with current assets of $120,000, current liabilities of $50,000, total assets of $150,000, and net sales of $80,000, would be:

2.4

Net sales for James, Inc. were $4,000,000; net income was $810,000; and gross profit was $1,300,000. Profit margin would be:

20.25%

With a beginning Accounts Receivable balance of $30,000, an ending balance of $46,000, and net credit sales of $480,000 for fiscal year 2018, compute the # of Days Sales Outstanding Ratio.

28.9

Net income was $45,000 in 2017 and $60,000 in 2018. The percentage increase or decrease in net income was:

33.33%

In the statement of cash flows, which of the following would be an addition to net income?

A decrease in Prepaid Insurance

During the month of October, Ford advertised on the Internet. Ford received the bill for $600 in October, but waited until November to pay the advertising expense. The journal entry to record the payment in November is:

Accounts Payable, debit; Cash, credit

An account that would be increased by a credit is:

Accounts Payable.

A check deposited for $646 is incorrectly accounted for as $464. The error should be shown on the bank reconciliation as:

Added to the balance per books

Internal control over a company's assets should include the following procedures:

All cash receipts will be deposited into the bank the same day they arrive. All cash payments will be made by check (except petty cash). Responsibilities and duties of employees will be divided

In the statement of cash flows, which event would cause cash to be increased?

An increase in Accounts Payable

How does the purchase of supplies on account affect the accounting equation?

Assets increase; liabilities increase

Which of the following groups of accounts have a normal debit balance?

Assets, expenses, and withdrawals

Accumulated Depreciation is found on which of the following financial statements?

Balance sheet

The May bank statement for Rental shows a balance of $6,300, but the balance per books shows a cash balance of $7,980. Other information includes:1. A check for $200 to pay the electric bill was recorded on the books as $20. 2. Included on the bank statement was a note collected by the bank for $400 plus interest of $30. 3. Checks outstanding totaled $260. 4. Bank service charges were $50. 5. Deposits in transit were $2,140. Which item(s) will require a journal entry to update the balance in the Cash account?

Bank service charges, note collected by the bank, and error made by Accounting Services

During the month of January, Katelyn invested $9,000 in starting her legal practice. The proper journal entry would be:

Cash, debit $9,000; Katelyn, Capital, credit $9,000

Grammy's Bakery had the following information for the bi-weekly pay period ending June 30: Employee NamePay rateHours workedCumulative earnings prior to current payrollDepartmentFederal income tax withheldP. Ganster$2,000Salaried$12,000Kitchen$86.00T. Baker$10.00/hour50$6,500Office$22.00 Assume:FICA-OASDI applied to the first $117,000 at a rate of 6.2%. FICA-Medicare applied at a rate of 1.45% FUTA applied to the first $7,000 at a rate of 0.6% SUTA applied to the first $7,000 at a rate of 5.4% State income tax is 3.8% Given the information above, what would be the amount applied to FUTA Payable?

Credit $3.00

On July 10, a customer of Delight's Restaurant paid the restaurant $500 as a partial payment toward a catering event held in June. The journal entry on July 10th to record this transaction is:

Debit Cash; Credit Accounts Receivable

You started the month with $100 in petty cash fund and at the end of the month you have cash of $20 and valid receipts for food expenses of $40. The entry to replenish the fund would be:

Debit Food Expense $40; Debit Over/Short $40; Credit Cash $80

If the balance of food inventory at the start of the month was $6,000 and at the end of the month you had $1,500 on hand, the adjusting entry for food expense would be

Debit Food Expense, $4,500; Credit Food Inventory $4,500.

The entry to record the payment of office salaries would be:

Debit Salaries Expense; Credit Cash

Both employees and employers pay which of the following taxes?

FICA taxes (OASDI and Medicare)

Food Cost on the P&L, as a percentage of sales, was 27.9% for 2018 and 28.6% for 2017. Which of the following statements is correct?

Food Cost increased at a slower rate (%) than sales

What type of an account is Wages and Salaries Payable?

Liability

Which of the following items are on both the income statement and the statement of owner's equity?

Net Income

The May bank statement for Consulting Services shows a balance of $7300, but the balance per books shows a cash balance of $8,980. Other information includes:1. A check for $200 to pay the electric bill was recorded on the books as $20.2. Included on the bank statement was a note collected by the bank for $400 plus interest of $30.3. Checks outstanding totaled $260.4. Bank service charges were $50.5. Deposits in transit were $2,140.Which item should be subtracted from bank balance during the bank reconciliation?

Outstanding check

Happy Valley Catering prepaid rent of $36,000 on January 1, 2019 for the following year. The Journal Entry for rent for each month during 2018 would be:

Prepaid Rent, credit $3,000; Rent Expense, debit $3,000

Which of the following accounts would NOT appear on the Balance Sheet?

Rent Expense

Which of the following ratios helps evaluate how well a company is earning profit for the common stockholders?

Return on stockholders' equity

Which of the following items is NOT listed on the balance sheet?

Revenue

Collins Restaurants reported $3,650,000 in Sales for 2018 and $3,345,000 for 2017. Controllable Earnings for 2018 were $1,355,000 and $1,215,000 for 2017. Using the Industry Rules from class, which of the following is correct?

Rule #1 was met

Collins Restaurants reported $5,150,000 in Sales for 2018 and $4,875,000 for 2017. Controllable Earnings for 2018 were $1,575,000 and $1,475,000 for 2017. Using the Industry Rules discussed in class, which of the following is correct?

Rule #1 was met

The beginning balance in the Capital account would appear on which financial statement?

Statement of Owner's Equity

Rick Corporation's Accounts Receivable increased by $25,000 during the year. What is the adjustment to the cash flow statement?

Subtract the increase from the net income in operating activities section.

Which of the following transactions would cause an asset to decrease and the owner's equity to decrease?

The owner withdrew cash from the business.

Jefferson Tutoring had the following payroll information on February 28: EmployeeGross PayCumulative Earnings Prior to this PayrollR Hitchcock$4,000$4,000 Assume:FICA tax rates are: OASDI 6.2% on a limit of $117,000 and Medicare 1.45%.State Unemployment tax rate is 2% on the first $7,000.Federal Unemployment tax rate is 0.8% on the first $7,000. Using the information above, the journal entry to record the payroll tax expense for Jefferson Tutoring would include:

a credit to FUTA payable for $24 a debit to Payroll Tax Expense in the amount of $390 a credit to SUTA Payable for $60

The employer's total FICA, SUTA and FUTA tax is recorded as:

a debit to Payroll Tax Expense

The employer's total FICA, SUTA, and FUTA tax is accounted for as:

a debit to Payroll Tax Expense

The bank statement included bank charges. On the bank reconciliation, this item is:

a deduction from the balance per company books.

The business provided services to a credit customer. To record this:

an asset is debited and revenue is credited.

If a company's revenues are higher than its expenses, it will cause

an increase in owner's equity

The employer records deductions from the employee's paycheck:

as credits to liability accounts until paid.

You meant to debit an asset account but posted it to an expense account by mistake. This would cause:

assets to be lower than they should be

If Prepaid Rent Expense for the period is NOT adjusted:

assets will be overstated and expenses will be understated

If the Prepaid Insurance account is NOT adjusted:

assets will be overstated and expenses will be understated

The balance sheet contains:

assets, liabilities and owner equity.

A corporation:

can continue indefinitely. has limited risk to stockholders. is owned by stockholders.

Expenditures for changing oil in a machine or a car would be:

charged to an expense account

If the balance of food inventory at the start of the month was $24,700 and at the end of the month you had $21,500 on hand, the adjusting entries for Food Inventory/Food Expense would be:

credit to Food Inventory for $3,200; debit to Food Expense for $3,200

The entry to record the disposal of a laptop computer with an original cost of $2,500 with accumulated depreciation of $1,500 for $500 in cash would be:

debit Accumulated Depreciation $1,500; debit Cash $500; debit Loss on Disposal of an Asset $500; credit Equipment $2,500.

The correct journal entry to record the payment of FUTA to the Federal Government is to:

debit FUTA Payable; credit Cash.

On November 1, Duane paid $24,000 in advance for a year's rent. The November 30 adjusting entry for rent expense should include a:

debit Rent Expense, $2,000

The beginning balance for the month in the Equipment account was $3,000. The company purchased an additional $1000 worth of Equipment during the month. The ending balance in the account is:

debit of $4,000

Greetings Online disposed of a van for $4,000 with an original cost of $22,000 with accumulated depreciation of $15,000. The journal entry would include a:

debit to Loss on Disposal of Plant Asset $3,000

A $100 petty cash fund has cash of $20 and valid receipts for $40. The entry to replenish the fund would include a:

debit to Over/Short for $40.

Owner's withdrawals:

decrease assets.

Mark paid $500 cash to partially reduce the amount owed for equipment that was previously bought on account. This transaction would:

decrease both assets and liabilities.

Sam's catering made a payment via check for $64 but it is incorrectly recorded on the books as $46. The $18 error should be shown on the bank reconciliation as:

deducted from the balance per books.

The account for Payroll Tax Expense includes all of the following except:

federal income tax

The number of allowances claimed by an employee determines how much will be withheld from their paycheck for:

federal income tax.

Outstanding checks:

have not been processed by the bank for payment but have been subtracted in the checkbook.

Net income or net loss is calculated on the:

income statement

Net income or net loss is calculated on the:

income statement.

Katelyn purchased $10,000 of new electronic equipment for her DJ Company on account. The effect on the basic accounting equation was to:

increase Equipment $10,000 and increase Accounts Payable $10,000.

It's the end of the accounting period and no electric bill has been received (but the expense has been incurred); you should record an entry that:

increases the total liabilities and increases the total expenses.

Which of the following is a non-depreciable asset?

land

A debit to a liability account was posted to an expense account. This would cause

liabilities to be overstated.

A credit to a liability account was posted to the capital account. This would cause:

liabilities to be understated.

A dishwasher that originally cost $5,000 has no estimated salvage value and was depreciated over 5 years (straight-line depreciation). At the end of the second year, it was sold for $2,500 cash. The transaction would result in a:

loss of $500

If beginning capital was $150,000, ending capital is $180,000, and the owner's withdrawals were $15,000, the amount of net income or net loss was:

net income of $45,000

The activity that is the most important indicator of financial health is the net cash flow from

operating activities

As Withdrawals increase

owner's equity decreases

A transaction completed by Norton Company caused a $4,000 increase in both the total assets and the total liabilities. This transaction could have been:

purchase of office equipment for $12,000, paying $8,000 cash, with the rest on account.

If management wishes to measure how effectively the assets were used in generating a profit, they could use the

return on assets

A gain on the sale of an asset occurs when:

the cash received is greater than the book value of the asset.

If Accounts Receivable has been credited, it is most likely that:

the company collected a payment from a customer

Noble Company's average collection period was 24.6 in Fiscal 2018 and 26.8 in Fiscal 2017. This change indicates:

the company's customers are paying faster.

The debit amount to Payroll Tax Expense represents:

the employer's portion of the payroll taxes

An outflow of cash from investing activities would be:

the purchase of plant property and equipment.

The depreciation of equipment will require an adjustment that results in:

total assets decreasing and total expenses increasing