ACC chap 11

Your page rank:

Total word count: 2575
Pages: 9

Calculate the Price

- -
275 words
Looking for Expert Opinion?
Let us have a look at your work and suggest how to improve it!
Get a Consultant

The total earnings of an employee for a payroll period is referred to as

gross pay.

The journal entry a company uses 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 amount of federal income taxes withheld from an employee’s gross pay is recorded as a(n)

liability

When a borrower receives the face amount of a discounted note less discount, this amount is known as:

the note proceeds

Assuming a 360-day year, when a $40,000, 90-day, 9% interest-bearing note payable matures, total payment will amount to:

$40,900

Assuming a 360-day year, the interest charged by the bank, at the rate of 9%, on a 90-day, discounted note payable of $100,000 is

$2,250

Notes may be issued

a. when assets are purchased. b. when borrowing money. c. to creditor’s to temporarily satisfy an account payable created earlier. d. all of these choices are correct.

The journal entry a company uses to record the issuance of an interest-bearing note for the purpose of borrowing funds for the business is

debit Cash; credit Notes Payable.

On June 8, Alton Co. issued an $80,000, 6%, 120-day note payable on an overdue account payable to Seller Co. Assume that the fiscal year of Alton Co. ends June 30. Which of the following relationships is true?

Seller is the borrower and credits Accounts Payable

Which of the following forms is typically given to employees at the end of the calendar year so that employees can file their individual income tax forms?

Wage and Tax Statement (Form W-2)

Which of the following taxes would be deducted in determining an employee’s net pay?

FICA taxes

Current liabilities are

due and payable within one year.

On June 8, Alton Co. issued an $95,000, 6%, 120-day note payable to Seller Co. What is the due date of the note?

October 6

Proper payroll accounting methods are important for a business for all the reasons below

a. good employee morale requires timely and accurate payroll payments. b. payroll and related payroll taxes have a significant effect on the net income of most businesses. d. payroll is subject to various federal and state regulations.

The current portion of long-term debt should

be reclassified as a current liability

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:

c. a debit to Vacation Pay Expense for $16,400.

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?

a. $3,971.00.

The journal entry a company uses to record accrued vacation privileges for its employees at the end of the year is

d. debit Vacation Pay Expense; credit Vacation Pay Payable.

Based on the following data, what is the quick ratio, rounded to one decimal point?

PICE

d. 7.1 (Cash + Accts Rec + marketable securities+ prepaid expense+ inventory / by accounts payable and accrued liabilities) =(60000+60000+50000+1000+69000)/(30000+4000

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?

600000.06120/360=1200 b.$61,200

The journal entry a company uses to record fully funded pension rights for its salaried employees at the end of the year is

d. debit Pension Expense; credit Cash.

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?

c. $58,400

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 PIC17

b. $54,000.

Based on the following data, what is working capital? PIC18

b. $206,000 (Working capital = (Cash + Accts Rec + Marketable Securities + Prepaid Exp + Inventory) – (Accounts Payable + Accrued Liabilities). =(60000+60000+50000+1000+69000)-(30000+4000)

Based on the following data, what is the current ratio, rounded to one decimal point? PIC17Q1

d. 7.1

The following totals for the month of June were taken from the payroll register of Xenos Company: PIC08

The entry to record the accrual of employer’s payroll taxes would include a a. credit to Social Security and Medicare Tax Payable for $2,100. b. debit to Payroll Tax Expense for $1,050. c. debit to Payroll Taxes Expense for $310. d. 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?

c. matching concept.

he following totals for the month of July were taken from the payroll register of Lakeside Company.
PICE091Q

d. credit to Salaries Payable for $12,150.

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?

b. None of these choices are correct.

A contingent liability that is probable and the dollar amount can be estimated should be

d. recorded and disclosed.

Which of the following taxes are employees not subject to?

b. State Unemployment Tax

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?

c. $9,203

Which of the following taxes are not included in the employer’s payroll taxes?

d. Federal income taxes

The amount of federal income taxes withheld from an employee’s gross pay is recorded as a(n)

a. asset. b. liability. c. contra account. d. payroll expense.

Which statement below is not a determinate in calculating the amount of federal income taxes withheld from an individuals pay?

d. Types of earnings

Which of the following taxes would be deducted in determining an employee’s net pay?

a. SUTA taxes b. FUTA taxes c. FICA taxes d. all of these choices are correct.

For which of the following taxes is there no ceiling on the amount of employee annual earnings subject to the tax?

b. only Medicare tax

Most employers are required to withhold from employees which of the following employment taxes?

a. FICA tax

An employee receives an hourly rate of $40, with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $350; cumulative earnings for year prior to current week, $99,700; social security tax rate, 6.0% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings. What is the gross pay for the employee?

d. $1,960.00

An employee receives an hourly rate of $27, with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $350; cumulative earnings for year prior to current week, $99,700; social security tax rate, 6.0% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings. What is the net amount to be paid to the employee?

d. $935.15

Payroll taxes levied against employees become liabilities

when the payroll is paid to employees

Which of the following are included in the employer’s payroll taxes?

a. SUTA taxes b. FUTA taxes c. FICA taxes d. all of these choices are correct.

Which of the following is required to be withheld from employee’s gross pay?

b. Only federal income tax

Payroll entries are made with data from the

a. payroll register.

The following totals for the month of April were taken from the payroll register of Magnum Company.

Salaries $10000
FICA taxes withheld $750
Income taxes withheld $2000
Medical insurance deductions $450
Unemployment Taxes $420

The entry to record accrual of employer’s payroll taxes would include

a. debit to Payroll Tax Expense for $1,170.

Use the following information to answer the following question.

Assuming no employees are subject to ceilings for their earnings, Jensen Company has the following information for the pay period of January 15 – 31, 20xx.

Gross payroll $10000
social security rate 6%
medicare rate 1.5%
Federal income tax withheld $1800
Federal unemployment tax rate 0.8%
Sate unemployment tax rate 5.4%

Assuming that all wages are subject to federal and state unemployment taxes, the Payroll Taxes Expense would be recorded as:

d. $1,370

A pension plan which promises employees a fixed annual pension benefit, based on years of service and compensation, is called a(n)

c. defined benefit plan.

Classify each of the following as:
1. Overhauling an engine in a large truck
2. Exterior and interior painting
3. Paving a new parking lot
4. New landscaping
5. Installing a new air conditioning system in an old building
6. Resurfacing a pool in an apartment building
7. Adding freon to an air conditioning system
8. Fixing damage due to a car accident

1.Extraordinary repairs 2.Ordinary Maintenance and Repairs 3.Asset improvements 4.Asset improvements 5.Asset improvements 6.Extraordinary Repairs 7.Ordinary Maintenance and repairs 8.Ordinary Maintenance and repairs

Match the intangible assets with their proper classification
1. Rights to sell a book and make a profit
2. McDonald’s Golden Arches
3. A new kitchen gadget that can be produced by only one company
4. Location of a company
5. I-Tunes Music
6. Reputation of a company
7. Nike Swoosh
8. Mickey Mouse

1.Copyright 2.Trademark 3.Patent 4.Goodwill 5.Copyright 6.Goodwill 7.Trademark 8.Trademark

Select the following to identify the payroll item with it’s characteristics.
1. Federal Income Tax
2. FICA – Social Security
3. FICA – Medicare
4. Federal Unemployment Compensation Tax (FUTA)
5. State Unemployment Compensation Tax (SUTA)

1. Amount is not limited, withheld for, employee only 2.Amount is limited, withheld from employee and matched by employer 3.Amount not limited, withheld from employee and matched by employer 4.Amount is limited , paid by employer only 5. Amount is limited, paid by employer only

A characteristic of a fixed asset is that it is

d. used in the operations of a business.

Which of the following is included in the cost of constructing a building?

c. Insurance costs during construction.

A used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $3,000, would have a cost basis of

a. $93,000

Expenditures that add to the utility of fixed assets for more than one accounting period are

d. utility expenditures.

All leases are classified as either

b. capital leases or operating leases.

A fixed asset’s estimated value at the time it is to be retired from service is called

a. residual value.

The method of determining depreciation that yields successive reductions in the periodic depreciation charge over the estimated life of the asset is

d. declining-balance.

When the amount of use of a fixed asset varies from year to year, the method of determining depreciation expense that best matches allocation of cost with revenue is

b. units-of-production.

A machine with a cost of $120,000 has an estimated residual value of $15,000 and an estimated life of 5 years or 15,000 hours. It is to be depreciated by the units-of-production method. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?

c. $35,000

Equipment with a cost of $220,000 has an estimated residual value of $30,000 and an estimated life of 10 years or 19,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 2,100 hours?

c. $19,000

A machine with a cost of $75,000 has an estimated residual value of $5,000 and an estimated life of 4 years or 18,000 hours. What is the amount of depreciation for the second full year, using the double declining-balance method?

c. $18,750

If a fixed asset, such as a computer, were purchased on January 1st for $3,750 with an estimated life of 3 years and a salvage or residual value of $150, the journal entry for monthly expense under straight-line depreciation is:
(Note: EOM indicates the last day of each month.)

EOM Depreciation expense 100 Accumulated Depreciation 100

The proper journal entry to purchase a computer costing $975 on account on January 2 to be utilized within the business would be:

Jan 2 Office Supplies 975 Accounts Payable 975

Expected useful life is

b. estimated at the time that the asset is placed in service.

The calculation for annual depreciation using the straight-line depreciation method is

b. depreciable cost / estimated useful life.

The calculation for annual depreciation using the units-of-production method is

b. (depreciable cost / estimated output) * the actual yearly output.

Computer equipment was acquired at the beginning of the year at a cost of $57,000 that has an estimated residual value of $9,000 and an estimated useful life of 5 years. Determine the 2nd year’s depreciation using straight-line depreciation.

d. $ 9,600

A fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset?

b. $2,000 gain

When a company discards machinery that is fully depreciated, this transaction would be recorded with the following entry

d. debit Accumulated Depreciation; credit Machinery

On December 31, Strike Company has decided to discard one of its batting cages. The initial cost of the equipment was $310,000 with an accumulated depreciation of $260,000. Depreciation has been taken up to the end of the year. The following will be included in the entry to record the disposal.

c. Equipment Cr. $310,000

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

d. depletion.

The Weber Company purchased a mining site for $1,750,000 on July 1, 2014. The company expects to mine ore for the next 10 years and anticipates that a total of 400,000 tons will be recovered. The estimated residual value of the property is $150,000. During 2014 the company extracted 6,500 tons of ore. The depletion expense for 2014 is

a. $26,000

Xtra Company purchased goodwill from Argus for $96,000. Argus had developed the goodwill over 12 years. How much would Xtra amortize the goodwill for its first year?

d. Goodwill is not amortized.

Which intangible assets are amortized over their useful life?

b. Patents

Fixed assets are ordinarily presented in the balance sheet

a. at cost less accumulated depreciation.

Current liabilities are

a. due and payable within one year.

On June 8, Alton Co. issued an $95,000, 6%, 120-day note payable to Seller Co. What is the due date of the note?

c. October 6

On June 8, Alton Co. issued an $90,000, 6%, 120-day note payable to Seller Co. Assuming a 360-day year for your calculations, what is the maturity value of the note?

a. $91,800

On July 8, Alton Co. issued an $80,000, 6%, 120-day note payable to Seller Co. Assume that the fiscal year of Alton Co. ends July 31. Using the 360-day year in your calculations, what is the amount of interest expense recognized by Alton in the current fiscal year?

b. $306.67

On June 8, Alton Co. issued an $80,000, 6%, 120-day note payable on an overdue account payable to Seller Co. Assume that the fiscal year of Alton Co. ends June 30. Which of the following relationships is true?

a. Alton is the borrower and debits Accounts Payable

A business borrowed $40,000 on March 1 of the current year by signing a 60-day, 9% interest bearing note. Assuming a 360-day year, when the note is paid on April 30, the entry to record the payment should include a

a. debit to Interest Expense $600.

When a borrower receives the face amount of a discounted note less discount, this amount is known as:

b. the note proceeds.

Assuming a 360-day year, when a $40,000, 90-day, 9% interest-bearing note payable matures, total payment will amount to:

c. $40,900

Mobile Co. issued a $45,000, 60-day, discounted note to Guarantee Bank. The discount rate is 6%. At maturity, assuming a 360-day year, the borrower will pay:

d. $45,000

Share This
Flashcard

More flashcards like this

NCLEX 10000 Integumentary Disorders

When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? a) ...

Read more

NCLEX 300-NEURO

A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. I can’t do anything without ...

Read more

NASM Flashcards

Which of the following is the process of getting oxygen from the environment to the tissues of the body? Diffusion ...

Read more

Unfinished tasks keep piling up?

Let us complete them for you. Quickly and professionally.

Check Price

Successful message
sending