ACC 205 Week 4 Exercise Assignment- Liability | Documents and Forms | Research Papers

ACC 205 Week 4 Exercise Assignment- Liability

ACC 205 Week 4 Exercise Assignment- Liability PLDZ-1011
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  1. Payroll accounting. Assume that the following tax rates and payroll information pertain to Brookhaven Publishing:
  • Social Security taxes: 4% on the first $55,000 earned per employee
  • Medicare taxes: 1.5% on the first $130,000 earned per employee
  • Federal income taxes withheld from wages: $7,500
  • State income taxes: 4% of gross earnings
  • Insurance withholdings: 1% of gross earnings
  • State unemployment taxes: 5.4% on the first $7,000 earned per employee
  • Federal unemployment taxes: 0.8% on the first $7,000 earned per employee

 

The company incurred a salary expense of $50,000 during February. All employees had earned less than $5,000 by month-end and no wages have been paid during the month.

  • Social Security taxes
  • Medicare taxes
  • Federal income taxes withheld
  • State income taxes
  • Insurance withholdings

 

  • Matching Social Security taxes
  • Matching Medicare taxes
  • State unemployment taxes
  • Federal unemployment taxes

 

 

  1. A review of selected financial activities of Visconti’s during 20XX disclosed the following:

 

 

 

 

 

1-Dec: Borrowed $10,000 from the First City Bank by signing a 3-month, 15% note payable.

 

Interest and principal are due at maturity.

 

 

 

10-Dec: Established a warranty liability for the XY-80, a new product. Sales are expected to

 

total 1,000 units during the month.  Past experience with similar products indicates

 

that 3% of the units will require repair, with warranty costs averaging $27 per unit (parts only).

 

22-Dec: Purchased $16,000 of merchandise on account from Oregon Company, terms 2/10, n/30.

 

26-Dec: Borrowed $5,000 from First City Bank; signed a 15% note payable due in 60 days. (Assume 360 day year for interest)

 

31-Dec: Repaired six XY-80s during the month at a total cost of $162

 

 

31-Dec: Accrued three days of salaries at a total cost of $1,400.

 

 

 

 

 

 

 

 

 

Instructions

 

 

  1. Notes payable. Red Bank Enterprises was involved in the following transactions during the fiscal year ending October 31:

2-Aug: Borrowed $55,000 from the Bank of Kingsville by signing a 90-day, 12% note.

20-Aug: Issued a $50,000 note to Harris Motors for the purchase of a $50,000 delivery truck. The note is due in 180 days and carries a 12% interest r ate.

10-Sep: Purchased merchandise from Pans Enterprises in the amount of $15,000.  Issued

a 30-day, 12% note in settlement of the balance owed.

11-Sep: Issued a $60,000 note to Datatex Equipment in settlement of an overdue account

payable of the same amount.  The note is due in 30 days and carries a 14% interest rate.

10-Oct: The note to Pans Enterprises was paid in full.

11-Oct: The note to Datatex Equipment was paid in full.

30-Oct: Paid note to Bank of Kingsville.

 

Instructions

 

Payroll accounting. Assume that the following tax rates and payroll information pertain to Brookhaven Publishing: Social Security taxes: 4% on the first $55,000 earned per employee Medicare taxes: 1.5% on the first $130,000 earned per employee
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