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

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Question 21

Multiple Choice

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During its first year of operations,a company granted employees vacation privileges and pension rights estimated at a cost of $21,500 and $15,000.The vacations are expected to be taken in the next year and the pension rights are expected to be paid in the future 5-30 years.What is the total cost of vacation pay and pension rights to be recognized in the first year?

A) $15,000
B) $36,500
C) $6,500
D) $21,500

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

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Question 22

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

A) True
B) False

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Question 23

Multiple Choice

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Assuming a 360-day year,when a $20,000,90-day,5% interest-bearing note payable matures,total payment will be

An employee receives an hourly rate of $15,with time and a half for all hours worked in excess of 40 during the week.Payroll data for the first week of the calendar year are as follows: hours worked,46; federal income tax withheld,$110; Social security tax rate,6%; and Medicare tax rate,1.5%; state unemployment compensation tax,3.4% on the first $7,000; federal unemployment compensation tax,0.8% on the first $7,000.What is the net amount to be paid to the employee? If required,round your answers to the nearest cent.

For proper matching of revenues and expenses,the estimated cost of fringe benefits must be recognized as an expense of the period during which the employee earns the benefits.

Kelly Howard has the following transactions.Prepare the journal entries. ​ ​

Proper payroll accounting methods are important for a business for all the reasons below except

Use the following key (a-d) to identify the proper treatment of each contingent liability. -Event is reasonably possible but amount is not estimable

​An installment note is a debt that requires the borrower to make equal periodic payments to the lender for the term of the note.

​If a company borrows money from a bank as an installment note,the interest portion of each annual payment will

Assuming a 360-day year,the interest charged by the bank,at the rate of 6%,on a 90-day,discounted note payable of $100,000 is

An interest-bearing note is a loan in which the lender deducts interest from the amount loaned before the money is advanced to the borrower.

Salaries Payable would be recorded in the amount of

Payroll taxes are based on the employee's net pay.

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

Journalize the following transactions for Riley Corporation:

For Company A and Company B: ​

In a defined benefits plan,the employer bears the investment risks in funding a future retirement income benefit.

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

Current liabilities are due