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Exam 11: Current Liabilities and Payroll

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Question 31

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On July 8,Jones Inc.issued an $80,000,6%,120-day note payable to Miller Company.Assume that the fiscal year of Jones ends on July 31.Using the 360-day year,what is the amount of interest expense recognized by Jones in the current fiscal year?

A) $700
B) $4,200
C) $307
D) $1,400

E) C) and D)
F) A) and B)

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Question 32

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Sadie White receives an hourly wage rate of $30,with time-and-a-half pay for all hours worked in excess of 40 during a week.Payroll data for the current week are as follows: hours worked,48; federal income tax withheld,$300; social security tax rate,6.0%; and Medicare tax rate,1.5%.What is the net amount to be paid to White?

A) $1,443.00
B) $1,143.00
C) $1,260.00
D) $1,000.00

E) A) and B)
F) A) and C)

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Question 33

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Internal controls for cash payments apply to payrolls.

An employee receives an hourly wage rate of $15,with time and a half for all hours worked in excess of 40 during the week.Payroll data for the current week are as follows: hours worked,46; federal income tax withheld,$110; cumulative earnings for the year prior to this week,$24,500; social security tax rate,6.0%; Medicare tax rate,1.5%; state unemployment compensation tax,3.4% on the first $7,000; and federal unemployment compensation tax,0.8% on the first $7,000.What is the net amount to be paid to the employee?

The following totals for the month of February were taken from the payroll register of Arcon Company:​ (a)How much is the total payroll tax expense for Arcon Company for this payroll? (b)Assume that the monthly salaries expense remains the same for the entire year and no employees are hired or fired during that time.Based on what you learned in Chapter 11 about payroll taxes,do you expect the total payroll tax expense to stay the same every month? Explain.

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

Roseland Design borrowed $700,000 on a 90-day note from CorpOne Funding Company.CorpOne discounts the note at 8%. (Assume a 360-day year is used for interest calculations.)

Each year,there is a ceiling for the amount that is subject to all of the following except

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

Ecco Company sold $150,000 of kitchen appliances with six-month warranties during September.The cost to repair defects under the warranty is estimated at 6% of the sales price.On October 15,a customer required a $200 part replacement,plus $85 labor under the warranty.​Provide the journal entry for (a)the estimated expense on September 30 and (b)the October 15 warranty work.

Receiving payment prior to delivering goods or services causes a current liability to be incurred.

According to a summary of the payroll of Scotland Company,$450,000 was subject to the 6.0% social security tax and $500,000 was subject to the 1.5% Medicare tax.Federal income tax withheld was $98,000.Also,$15,000 was subject to state (4.2%) and federal (0) 8%) unemployment taxes.The journal entry to record accrued salaries would include a

Hadley Industries warrants its products for one year.The estimated product warranty expense is 4% of sales.Assume that sales were $210,000 for June.In July,a customer received warranty repairs requiring $205 of parts and $75 of labor.

Core Company had the following assets and liabilities as of December 31:​​ Calculate the current ratio,working capital,and quick ratio.​

The following totals for the month of April were taken from the payroll register of Magnum Company:​​ The entry to record the accrual of the employer's payroll taxes would include a

Hall Company sells merchandise with a one-year warranty.In the current year,sales consist of 4,500 units.It is estimated that warranty repairs will average $10 per unit sold and 30% of the repairs will be made in the current year and 70% in the next year.In the current year's income statement,Hall should show warranty expense of

Generally,all deductions made from an employee's gross pay are required by law.

The employee's earnings record would contain which of the following data that the payroll register would probably not contain?

On June 8,Smith Technologies issued a $75,000,6%,140-day note payable to Johnson Company.What is the due date of the note?

All long-term liabilities eventually become current liabilities.