Accounting

Accounting Question

Q uestion

Financial & Managerial Accounting, Chapter 10, 11, and 12

Description:

Chapter 10

Assignment: Chapter 10 Homework
1.
 
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Calculate Payroll

Snyder Company has three employees—a consultant, a computer programmer, and an administrator. The following payroll information is available for each employee:

For the current pay period, the computer programmer worked 60 hours and the administrator worked 50 hours. The federal income tax withheld for all three employees, who are single, can be determined from the wage bracket withholding table inExhibit 3. Assume further that the social security tax rate was 6.0%, the Medicare tax rate was 1.5%, and one withholding allowance is $70.

Determine the gross pay and the net pay for each of the three employees for the current pay period. If required, round your answers to two decimal places.

  Consultant Computer Programmer Administrator
Gross pay $   _________________   $   _________________   $   _________________  
Net pay $   _________________   $   _________________   $   _________________  

2.
 

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Summary Payroll Data

In the following summary of data for a payroll period, some amounts have been intentionally omitted:

a.  Calculate the amounts omitted in lines (1), (3), (8), and (12).

(1) $   _________________  
(3) $   _________________  
(8) $   _________________  
(12) $   _________________  


 

b.  Journalize the entry to record the payroll accrual. If an amount box does not require an entry, leave it blank.



 
 
       
 
 
     
     
 
 
     
     
 
 
     
     
 
 
     
     
 
 
     
     
 
 
     
     
 
 
     
     
 
 
     
     
 
 
     
     
       

 



 

c.  Journalize the entry to record the payment of the payroll.



 
 
       
 
 
     
 
 
 
 
     
       

 


3.
 

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Payroll Entries

The payroll register for Jaffrey Company for the week ended May 16 indicated the following:

In addition, state and federal unemployment taxes were calculated at the rate of 5.4% and 0.8%, respectively, on $225,000 of salaries.

For a compound transaction, if an amount box does not require an entry, leave it blank.


 

a.  Journalize the entry to record the payroll for the week of May 16.



 
 
       
 
 
     
     
 
 
     
     
 
 
     
     
 
 
     
     
 
 
     
     
       

 



 

b.  Journalize the entry to record the payroll tax expense incurred for the week of May 16.



 
 
       
 
 
     
     
 
 
     
     
 
 
     
     
 
 
     
     
 
 
     
     
       

 


4.
 
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Quick Ratio

The current assets and current liabilities for Apple Inc. and Dell, Inc., are shown as follows at the end of a recent fiscal period:

a.  Determine the quick ratio for both companies. If required, round your answers to one decimal place.

  Quick Ratio
Apple Inc.:   _________________  
Dell Inc.:   _________________  

b.  Which company has a stronger relative cash and short-term investment position?

  _________________  

5.
 
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Entries for Payroll and Payroll Taxes

The following information about the payroll for the week ended December 30 was obtained from the records of Qualitech Co.:

Required:

If an amount box does not require an entry, leave it blank.

1a.  Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the entry on December 30, to record the payroll.

Date Account Debit Credit
Dec. 30   _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  

1b.   Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the entry on December 30, to record the employer's payroll taxes on the payroll to be paid on December 31. Of the total payroll for the last week of the year, $35,000 is subject to unemployment compensation taxes.


Date Account Debit Credit
Dec. 30   _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  

2a.   Assuming that the payroll for the last week of the year is to be paid on January 5 of the following fiscal year, journalize the entry on December 30, to record the payroll.


Date Account Debit Credit
Dec. 30   _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  

2b.  Assuming that the payroll for the last week of the year is to be paid on January 5 of the following fiscal year, journalize the entry to record the employer's payroll taxes on the payroll to be paid on January 5. Since it is a new fiscal year, all $675,000 in salaries is subject to unemployment compensation taxes.


Date Account Debit Credit
Jan. 5   _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  
    _________________     _________________     _________________  

6.
 
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Wage and Tax Statement Data on Employer FICA Tax

Ehrlich Co. began business on January 2, 2013. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal income tax were withheld in the required amounts. An employee who is hired in the middle of the month receives half the monthly salary for that month. All required payroll tax reports were filed, and the correct amount of payroll taxes was remitted by the company for the calendar year. Early in 2014, before the Wage and Tax Statements (Form W-2) could be prepared for distribution to employees and for filing with the Social Security Administration, the employees' earnings records were inadvertently destroyed.

None of the employees resigned or were discharged during the year, and there were no changes in salary rates. The social security tax was withheld at the rate of 6.0% and Medicare tax at the rate of 1.5%. Data on dates of employment, salary rates, and employees' income taxes withheld, which are summarized as follows, were obtained from personnel records and payroll records:

Required:

1.  Calculate the amounts to be reported on each employee's Wage and Tax Statement (Form W-2) for 2013. Enter amounts to the nearest cent if required. Enter all amounts as positive numbers.

Employee Gross Earnings Federal Income Tax Withheld Social Security Tax Withheld Medicare Tax Withheld
Arnett $   _________________     $   _________________     $   _________________     $   _________________    
Cruz   _________________       _________________       _________________       _________________    
Edwards   _________________       _________________       _________________       _________________    
Harvin   _________________       _________________       _________________       _________________    
Nicks   _________________       _________________       _________________       _________________    
Shiancoe   _________________       _________________       _________________       _________________    
Ward   _________________       _________________       _________________       _________________    
      $   _________________     $   _________________    

2.  Calculate the following employer payroll taxes for the year: (a) social security; (b) Medicare; (c) state unemployment compensation at 5.4% on the first $10,000 of each employee's earnings; (d) federal unemployment compensation at 0.8% on the first $10,000 of each employee's earnings; (e) total.

(a) $   _________________  
(b) $   _________________  
(c) $   _________________  
(d) $   _________________  
(e) $   _________________  

 

Assignment: Chapter 11 Homework
1.
 

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Issuing Stock

Willow Creek Nursery, with an authorization of 75,000 shares of preferred stock and 200,000 shares of common stock, completed several transactions involving its stock on October 1, the first day of operations. The trial balance at the close of the day follows:

All shares within each class of stock were sold at the same price. The preferred stock was issued in exchange for the land and buildings.


 

Journalize the entries to record the (1) common and (2) preferred stock transactions summarized in the trial balance.

For a compound transaction, if an amount box does not require an entry, leave it blank.



 
 
       
(1)
 
     
     
 
 
     
     
 
 
     
     
       

 



 

For a compound transaction, if an amount box does not require an entry, leave it blank.



 
 
       
(2)
 
     
     
 
 
     
     
 
 
     
     
 
 
     
     
       

 


2.
 

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Issuing Stock

Workplace Products Inc., a wholesaler of office products, was organized on February 1 of the current year, with an authorization of 10,000 shares of preferred 2% stock, $120 par and 250,000 shares of $25 par common stock. The following selected transactions were completed during the first year of operations:

Journalize the transactions.


 

Feb. 1.  Issued 180,000 shares of common stock at par for cash.



 
 
       
Feb. 1
 
     
 
 
 
 
     
       

 



 

Feb. 1.  Issued 400 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.



 
 
       
Feb. 1
 
     
 
 
 
 
     
       

 



 

Mar. 9.  Issued 30,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $200,000, $550,000, and $135,000, respectively.

For a compound transaction, if an amount box does not require an entry, leave it blank.



 
 
       
Mar. 9
 
     
     
 
 
     
     
 
 
     
     
 
 
     
     
 
 
     
     
       

 



 

Apr. 13.  Issued 8,500 shares of preferred stock at $131 for cash.

For a compound transaction, if an amount box does not require an entry, leave it blank.



 
 
       
Apr. 13
 
     
     
 
 
     
     
 
 
     
     
       

 


3.
 
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Effect of Cash Dividend and Stock Split

Indicate whether the following actions would increase, decrease, or not affect Indigo Inc.'s total assets, liabilities, and stockholders' equity:

  Assets Liabilities Stockholders' Equity
1.  Authorizing and issuing stock certificates in a stock split   _________________     _________________     _________________  
2.  Declaring a stock dividend   _________________     _________________     _________________  
3.  Issuing stock certificates for the stock dividend declared in (2)   _________________     _________________     _________________  
4.  Declaring a cash dividend   _________________     _________________     _________________  
5.  Paying the cash dividend declared in (4)   _________________     _________________     _________________  

4.
 

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Selected Dividend Transactions, Stock Split

Selected transactions completed by Canyon Ferry Boating Corporation during the current fiscal year are as follows:

Journalize the transactions.

If no entry is required, type "No entry required" and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank.


 

Jan. 8.  Split the common stock 2 for 1 and reduced the par from $80 to $40 per share. After the split, there were 150,000 common shares outstanding.



 
 
       
Jan. 8
 
     
 
 
 
 
     
       

 



 

Apr. 30.  Declared semiannual dividends of $0.75 on 18,000 shares of preferred stock and $0.28 on the common stock payable on July 1.



 
 
       
Apr. 30
 
     
 
 
 
 
     
       

 



 

July 1.  Paid the cash dividends.



 
 
       
July 1
 
     
 
 
 
 
     
       

 



 

Oct. 31.  Declared semiannual dividends of $0.75 on the preferred stock and $0.14 on the common stock (before thestock dividend). In addition, a 5% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $52.



 
 
       
Cash dividends
 
     
 
 
 
 
     
       
Stock dividends
 
     
     
 
 
     
     
 
 
     
     
       

 



 

Dec. 31.  Paid the cash dividends and issued the certificates for the common stock dividend.



 
 
       
Payment
 
     
 
 
 
 
     
       
Issuance
 
     
 
 
 
 
     
       

 


5.
 
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EPS

For a recent year, OfficeMax and Staples are two companies competing in the retail office supply business. OfficeMax had a net income of $71,155,000, while Staples had a net income of $881,948,000. OfficeMax had preferred stock of $30,901,000 with preferred dividends of $2,527,000. Staples had no preferred stock. The average outstanding common shares for each company were as follows:

 Determine the earnings per share for each company. Round to two decimal places.

OfficeMax Earnings $   _________________   per share
Staples Earnings $   _________________   per share

6.
 

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Selected Stock Transactions

The following selected accounts appear in the ledger of Orion Inc. on February 1, 2014, the beginning of the current fiscal year:

During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows:

Journalize the entries to record the transactions.

For a compound transaction, if an amount box does not require an entry, leave it blank.

Required:


 

a.  Issued 360,000 shares of common stock at $22, receiving cash.



 
 
       
 
 
     
     
 
 
     
     
 
 
     
     
       

 



 

b.  Issued 14,000 shares of preferred 1% stock at $43.



 
 
       
 
 
     
     
 
 
     
     
 
 
     
     
       

 



 

c.  Purchased 66,000 shares of treasury common for $18 per share.



 
 
       
 
 
     
 
 
 
 
     
       

 



 

d.  Sold 51,000 shares of treasury common for $21 per share.



 
 
       
 
 
     
     
 
 
     
     
 
 
     
     
       

 



 

e.  Sold 10,000 shares of treasury common for $16 per share.



 
 
       
 
 
     
     
 
 
     
     
 
 
     
     
       

 



 

f.  Declared cash dividends of $0.40 per share on preferred stock and $0.03 per share on common stock.



 
 
       
 
 
     
 
 
 
 
     
       

 



 

g.  Paid the cash dividends.



 
 
       
 
 
     
 
 
 
 
     
       

 

 

 

Assignment: Chapter 12 Homework
1.
 

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Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method

On the first day of its fiscal year, Woodard Company issued $12,000,000 of 10-year, 8% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 10%, resulting in Woodard Company receiving cash of $10,504,541.


 

a.  Journalize the entries to record the following:

For a compound transaction, if an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar.



 
 
       
1.
 
     
     
 
 
     
     
 
 
     
     
       
2.
 
     
 
 
 
 
     
       
3.
 
     
 
 
 
 
     
       
4.
 
     
 
 
 
 
     
       

 


 

b.  Determine the amount of the bond interest expense for the first year.
$   _________________  

 

2.
 

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Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method

Yang Corporation wholesales repair products to equipment manufacturers. On May 1, 2014, Yang Corporation issued $20,000,000 of 10-year, 9% bonds at a market (effective) interest rate of 7%, receiving cash of $22,842,560. Interest is payable semiannually on May 1 and November 1.


 

a.  Journalize the entry to record the issuance of bonds on May 1, 2014. For a compound transaction, if an amount box does not require an entry, leave it blank.



 
 
       
 
 
     
     
 
 
     
     
 
 
     
     
       

 



 

b.  Journalize the entry to record the first interest payment on November 1, 2014, and amortization of bond premium for six months, using the straight-line method. (Round to the nearest dollar.) For a compound transaction, if an amount box does not require an entry, leave it blank.



 
 
       
 
 
     
     
 
 
     
     
 
 
     
     
       

 


3.
 

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Entries for Issuing and Calling Bonds; Loss

Polders Corp., a wholesaler of office equipment, issued $40,000,000 of 10-year, 8% callable bonds on April 1, 2014, with interest payable on April 1 and October 1. The fiscal year of the company is the calendar year.

Journalize the entries to record the following selected transactions:


 

Issued the bonds for cash at their face amount.



 
 
       
2014 Apr. 1
 
     
 
 
 
 
     
       

 



 

Paid the interest on the bonds.



 
 
       
2014 Oct. 1
 
     
 
 
 
 
     
       

 



 

Called the bond issue at 104, the rate provided in the bond indenture. (Omit entry for payment of interest.) For a compound transaction, if an amount box does not require an entry, leave it blank.



 
 
       
2018 Oct. 1
 
     
     
 
 
     
     
 
 
     
     
       

 


4.
 

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Entries for Issuing and Calling Bonds; Gain

Robbins Corp. produces and sells wind-energy-driven engines. To finance its operations, Robbins Corp. issued $30,000,000 of 20-year, 10% callable bonds on March 1, 2014, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year.

Journalize the entries to record the following selected transactions:


 

Issued the bonds for cash at their face amount.



 
 
       
2014 Mar. 1
 
     
 
 
 
 
     
       

 



 

Paid the interest on the bonds.



 
 
       
2014 Sept. 1
 
     
 
 
 
 
     
       

 



 

Called the bond issue at 98, the rate provided in the bond indenture. (Omit entry for payment of interest.) For a compound transaction, if an amount box does not require an entry, leave it blank.



 
 
       
2020 Sept. 1
 
     
     
 
 
     
     
 
 
     
     
       

 


5.
 
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Number of Times Interest Charges are Earned

The following data were taken from recent annual reports of Southwest Airlines, which operates a low-fare airline service to over 50 cities in the United States:

a.  Determine the number of times interest charges are earned for the current and preceding years. Round to one decimal place.

Current year   _________________  
Preceding year   _________________  

b.  Although Southwest Airlines had enough earnings to pay interest in the preceding year, the   _________________   in this ratio will be   _________________   by the debtholders.

Upon completion, I will verify the answers on the cengage platform. Thank you thank you and please let me know if there is anymore information I can provide.

 


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