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Exam 9: Accounting for Current Liabilities

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Question 101

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Gross pay is also called take-home pay.

A) True
B) False

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Question 102

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The difference between the amount borrowed and the amount repaid is referred to as _______________.

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Question 103

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The amount of federal income taxes withheld from an employee's paycheck is determined by:

A _______________________ is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer.

An employer has an employee benefit package that includes employer-paid health insurance and an employer-paid retirement program. During January, the employer-paid health insurance equaled $7,500 and the amount the employer agreed to contribute to the employee retirement program was 10% of the employees' $150,000 gross salaries. Prepare the general journal entry to record these employee benefits.

Accounts payable:

A company has 90 employees and a weekly payroll of $117,000. The FICA-Social Security tax is 6.2% and the FICA-Medicare tax is 1.45%. The total withholding for federal income tax is $16,500 for the current week. Calculate the amount of FICA taxes owed (assume no employee's salary is over the FICA limit) and prepare the journal entry to accrue this week's salaries expense and withholdings.

The amount of federal income tax withheld is based on the employee's annual earnings rate plus the number of withholding allowances claimed by the employee.

__________ are obligations due within one year or the company's operating cycle, whichever is longer.

If a company paid $350,000 in bonuses, and net income prior to the bonus was $4,200,000, what was the bonus percentage offered to the employees during 2010?

A company borrowed $60,000 on a 60-day, 10% note payable from its bank. Compute the total cash payment at the note's maturity.

On December 1, 2013, Gates Company borrowed $45,000 cash from First Bank on a 90-day, 9% note payable. Gates is a calendar year company a. Prepare Gate's general journal entry to record the issuance of the note payable. b. Prepare Gate's general journal entry to record the accrued interest due at December 31, 2013. c. Prepare Gate's general journal entry to record the payment of the note on March 1, 2014. Assume no other entries related to this note were made in 2014.

Match the following definitions with the appropriate terms

Describe employer responsibilities for reporting payroll taxes. (To the extent possible, reference the form to be filed for each tax.)

A company sells personal computers, with an included two-year warranty for $2,300 each. During the current year, the company sells 400 computers. On the basis of past experience, the warranty costs are estimated to be $250 per computer. The actual warranty costs (paid in cash) by the company during the current year were $65,000. Prepare general journal entries to record the (a) estimated warranty expense and (b) warranty repair costs during current year.