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Exam 10: Liabilities: Current, Installment Notes, and Contingencies

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Question 91

True/False

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One of the more popular defined contribution plans is the 401k plan.

A) True
B) False

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Question 92

Multiple Choice

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

A) debit Salary Expense; credit Cash
B) debit Pension Expense; credit Unfunded Pension Liability
C) debit Pension Expense; credit Unfunded Pension Liability and Cash
D) debit Pension Expense; credit Cash

E) A) and D)
F) None of the above

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Question 93

Multiple Choice

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The journal entry used to record the payment of a discounted note is

The following totals for the month of June were taken from the payroll register of Arcon Company: The entry to record the payment of net pay would include a

Journalize the following transactions for Riley Corporation:

Match the following terms or phrases in (a-g) with the explanations in 1-8. Terms or phrases may be used more than once. -Current assets - Current liabilities A)Current ratio B)Working capital C)Quick assets D)Quick ratio E)Record an accrual and disclose in the notes to the financial statements F)Disclose only in notes to financial statements G)No disclosure needed in notes to financial statements

Mobile Sales has five sales employees which receive weekly paychecks. Each earns $11.50 per hour and each has worked 40 hours in the pay period. Each employee pays 12% of gross in federal income tax, 3% of gross in state income tax, 6% of gross in social security tax, 1.5% of gross in Medicare tax, and 0.5% of gross in state disability insurance. Journalize the pay period ending January 19 which will be paid to the employees January 26.

Hall Company sells merchandise with a one-year warranty. In the current year, sales consisted 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

Martin Jackson receives an hourly wage rate of $30, with time and a half for all hours worked in excess of 40 hours during a week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $350; social security tax rate, 6.0%; and Medicare tax rate, 1.5%. What is the net amount to be paid to Jackson?

List five internal controls that relate directly to payroll.

Use the following key (a-d) to identify the proper treatment of each contingent liability.a.Record only b.Record and disclose c.Disclose only d.Do not record or disclose -Event is reasonably possible and amount is estimable

Match each payroll item that follows to the one item (a-f) that best describes its characteristics. -State unemployment compensation tax (SUTA) A)Amount is limited, withheld from employee only B)Amount is limited, withheld from employee and matched by employer C)Amount is limited, paid by employer only D)Amount is not limited, withheld from employee only E)Amount is not limited, withheld from employee and matched by employer F)Amount is not limited, paid by employer only

Medicare taxes are paid by both the employee and the employer.

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

The Crafter Company has the following assets and liabilities: Determine the quick ratio (rounded to one decimal point) .

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

Townson Company had gross wages of $180,000 during the week ended December 10. All earnings are subject to social security tax, while the amount of wages subject to federal and state unemployment taxes was $24,000. Tax rates are as follows: The total amount withheld from employee wages for federal income taxes was $32,000.(a)Journalize the entry to record the payroll for the week of December 10. If required, round your answers to the nearest cent.(b)Journalize the entry to record the payroll tax expense incurred for the week of December 10. If required, round your answers to the nearest cent.​

Match the following terms or phrases in (a-g) with the explanations in 1-8. Terms or phrases may be used more than once. -Remote contingent liability A)Current ratio B)Working capital C)Quick assets D)Quick ratio E)Record an accrual and disclose in the notes to the financial statements F)Disclose only in notes to financial statements G)No disclosure needed in notes to financial statements

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

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