FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 9: Reporting and Analyzing Current Liabilities

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 81

Essay

Review LaterAdd Note

Review Later

A company sells its product subject to a warranty that covers the cost of parts for repairs during the six months after the date of sale.Warranty costs are estimated to be 6% of sales.During the month of June,the company performed warranty work and used $12,000 worth of parts for the warranty repairs.The total sales for June were equal to $450,000. 1.Record the warranty expense for the month of June. 2.Record the costs of the warranty work completed in June. 3.If the Estimated Warranty Liability account had a credit balance of $10,000 on May 31,what is the account balance at June 30?

Correct Answer

verified

1.
3.$1...

View Answer

Show Answer

Question 82

Matching

Review LaterAdd Note

Review Later

Classify each of the following items

Premises

Responses

Accrued wages payable

Contingent liability

Payroll taxes payable

Estimated liability

Lawsuit against the company

Current liability

Warranty on products sold this year

Accounts payable

Vacation benefits

Property taxes payable

Income taxes payable

Unearned revenues

Debt guarantees

Premises

Accrued wages payable

Payroll taxes payable

Lawsuit against the company

Warranty on products sold this year

Accounts payable

Vacation benefits

Property taxes payable

Income taxes payable

Unearned revenues

Debt guarantees

Responses

Contingent liability

Estimated liability

Current liability

Show Answer

Correct Answer

Premises

Responses

Accrued wages payable

Payroll taxes payable

Lawsuit against the company

Warranty on products sold this year

Accounts payable

Vacation benefits

Property taxes payable

Income taxes payable

Unearned revenues

Debt guarantees

Premises

Accrued wages payable

Payroll taxes payable

Lawsuit against the company

Warranty on products sold this year

Accounts payable

Vacation benefits

Property taxes payable

Income taxes payable

Unearned revenues

Debt guarantees

Responses

Question 83

True/False

Review LaterAdd Note

A corporation has a $42,000 credit balance in the Income Tax Payable account.Period end information shows that the actual liability is $50,000.The company should record an entry to debit Income Tax Expense for $8,000 and credit Income Taxes Payable for $8,000.

A company had income before interest expense and income taxes of $176,000 and its interest expense is $55,000.Calculate the company's times interest earned ratio.

Employers can use a wage bracket withholding table to compute federal income taxes withheld from each employee's gross pay.

When the times interest earned ratio declines,the likelihood of default on liabilities increases.

Classify each of the following items as a: current liability,long-term liability or not a liability.

Employers must pay FICA taxes that are equal to amount being withheld from their employees.

Employers must keep certain payroll records,including individual earnings reports for each employee.

On June 1,2010,Martin Company signed a $25,000,120-day,6% note payable to cover a past due account payable. a. What is the total amount of interest to be paid on this note? b. Prepare Martin Company's general journal entry to record the issuance of the note payable c. Prepare Martin Company's general journal entry to record the payment of the note on September 29, 2010.

If a company had income before interest and taxes in the amount of $2,345,540 and a times interest earned ratio of 5.2,what would be the total amount of the company's interest expense?

An employee earned $3,450 for the current period.Calculate the total and individual amounts to be withheld for social security (6.2%),Medicare (1.45%)and federal income tax (15%)assuming the entire employee's pay is subject to FICA taxes.

If the times interest ratio:

What are estimated liabilities? Provide at least two examples and explain why they are classified as estimated liabilities.

An estimated liability:

Employers are required to pay local,state and federal payroll taxes.

Vacation benefits are a form of estimated liabilities for an employer.

Payments of FUTA are made quarterly to a federal depository bank if the total amount due exceeds $1,000.

The annual Federal Unemployment Tax Return is:

When the number of withholding allowances increases,the amount of income tax withheld increases.