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Exam 11: Current Liabilities and Payroll

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Question 21

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Amounts withheld from each employee for social security and Medicare vary by state.

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Question 22

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Which of the following would most likely be classified as a current liability?

A) two-year note payable
B) bond payable
C) mortgage payable
D) unearned rent

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Question 23

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Taxes deducted from an employee's earnings to finance social security and Medicare benefits are called FICA taxes.

Lee Company has the following information for the pay period of December 15-31:​​ Assuming no employees are subject to ceilings for taxes on their earnings,Salaries Payable would be recorded for

The proceeds of a discounted note are equal to the face value of the note.

An unfunded pension liability is reported on the balance sheet as

Excom sells radios,and each unit carries a two-year replacement warranty.The cost of repair defects under the warranty is estimated at 5% of the sales price.During September,Excom sells 100 radios for $50 each.One radio is actually replaced during September.For what amount in September would Excom debit Product Warranty Expense?

John Woods' weekly gross earnings for the present week were $2,500.Woods has two exemptions.Using an $80 value for each exemption and the tax rate schedule below,what is Woods' federal income tax withholding?​

The payroll summary for December 31 for Waters Co.revealed total earnings of $80,000.Earnings subject to 6.0% social security tax were $60,000; earnings subject to 1.5% Medicare tax were $80,000; and earnings of $3,000 were subject to 4.3% state and 0.8% federal unemployment compensation tax.Journalize the entry to record the accrual of payroll taxes.

The journal entry to record the payment of an interest-bearing note is

Martin Services Company provides its employees vacation benefits and a defined contribution pension plan.Employees earned vacation pay of $39,500 for the period.The pension plan requires a contribution to the plan administrator equal to 9% of employee salaries.Salaries were $750,000 during the period.Provide the journal entries for (a)the vacation pay and (b)the pension benefit.

According to a summary of the payroll of Scotland Company,$500,000 was subject to the 6.0% social security tax and 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 the accrued salaries would include a​

A pension plan that requires the employer to make annual pension contributions,with no promise to employees regarding future pension payments,is termed

Use this information for Magnum Company to answer the following questions. ​ 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

Federal income taxes are subject to a maximum amount per employee per year.

The amount of money a borrower receives from the lender is called the discount rate.

In order to be a recorded contingent liability,the liability must be possible and easily estimated.

Match each of the following items with the term or phrase (a-g) that best describes it. Terms or phrases may be used more than once. -Probable likelihood and estimable liability

List five internal controls that relate directly to payroll.

Use the following information and calculate the quick ratio for Davis Company and for Bender Inc.​​ ​