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Connect - another Financial Accounting, Chapter 9, Exercises of Financial Accounting

Merger Co. has 10 employees, each of whom earns $1,850 per month and has been employed since January 1. FICA Social Security taxes are 6.2% of the first $118,500 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to each employee

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Connect - another Financial Accounting, Chapter 9
1.
Dextra Computing sells merchandise for $18,000 cash on September 30 (cost of
merchandise is $10,800). The sales tax law requires Dextra to collect 2% sales tax
on every dollar of merchandise sold. Record the entry for the $18,000 sale and its
applicable sales tax. Also record the entry that shows the payment of the 2% tax on
this sale to the state government on October 15.
No Date General Journal Debit Credit
1 Sep 30 Cashselected answer correct 18,360selected answer correct not attempted
Salesselected answer correct not attempted 18,000selected answer correct
Sales taxes payableselected answer correct not attempted 360selected answer correct
2 Sep 30 Cost of goods soldselected answer correct 10,800selected answer correct not attempted
Merchandise inventoryselected answer correct not attempted 10,800selected answer correct
3 Oct 15 Sales taxes payableselected answer correct 360selected answer correct not attempted
Cashselected answer correct not attempted 360selected answer correct
-----------------------------------------------------------------------------------
2.
Ticketsales, Inc., receives $4,920,000 cash in advance ticket sales for a four-date
tour of Bon Jovi. Record the advance ticket sales on October 31. Record the
revenue earned for the first concert date of November 5, assuming it represents one-
fourth of the advance ticket sales. Ticketsales, Inc. initially records prepaid and
unearned items in balance sheet accounts.
No Date General Journal Debit
1 Oct 31 Cashselected answer correct 4,920,000selected answer
correct
Unearned ticket revenueselected answer
correct not attempted
2 Nov 05 Unearned ticket revenueselected answer correct 1,230,000selected answer
correct
Earned ticket revenueselected answer correct not attempted
-----------------------------------------------------------------------------------
3.
On November 7, 2017, Mura Company borrows $190,000 cash by signing
a 90-day, 12% note payable with a face value of $190,000.9(Use 360
days a year. Do not round your intermediate calculations.)
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Connect - another Financial Accounting, Chapter 9

Dextra Computing sells merchandise for $18,000 cash on September 30 (cost of

merchandise is $10,800). The sales tax law requires Dextra to collect 2% sales tax

on every dollar of merchandise sold. Record the entry for the $18,000 sale and its

applicable sales tax. Also record the entry that shows the payment of the 2% tax on

this sale to the state government on October 15.

No Date General Journal Debit Credit 1 Sep 30 Cashselected answer correct 18,360selected answer correct n Salesselected answer correct not attempted 18,000selected an Sales taxes payableselected answer correct not attempted 360 selected an 2 Sep 30 Cost of goods soldselected answer correct 10,800selected answer correct n Merchandise inventoryselected answer correct not attempted 10,800selected an 3 Oct 15 Sales taxes payableselected answer correct 360 selected answer correct n Cashselected answer correct not attempted 360 selected an


Ticketsales, Inc., receives $4,920,000 cash in advance ticket sales for a four-date

tour of Bon Jovi. Record the advance ticket sales on October 31. Record the

revenue earned for the first concert date of November 5, assuming it represents one-

fourth of the advance ticket sales. Ticketsales, Inc. initially records prepaid and

unearned items in balance sheet accounts.

No Date General Journal Debit 1 Oct 31 Cashselected answer correct 4,920,000selected answer correct Unearned ticket revenueselected answer correct not attempted 2 Nov 05 Unearned ticket revenueselected answer correct 1,230,000selected answer correct Earned ticket revenueselected answer correct not attempted


On November 7, 2017, Mura Company borrows $190,000 cash by signing

a 90-day, 12% note payable with a face value of $190,000. (Use 360

days a year. Do not round your intermediate calculations.)

1. Compute the accrued interest payable on December 31, 2017.

Principal x Rate (%) x Time = Interest

Total

through

maturity

$190,000selected

answer correct

12 selected

answer

correct

90/360selected

answer correct

$5,700selected

answer correct

Year end

interest

accrual

$190,000selected

answer correct

12 selected

answer

correct

54/360selected

answer correct

$3,420selected

answer correct

Interest

recognized

February 5

$190,000selected

answer correct

12 selected

answer

correct

36/360selected

answer correct

$2,280selected

answer correct

2. & 3. Prepare the journal entry to record the accrued interest expense at

December 31, 2017 and payment of the note at maturity.

No Date General Journal Debit Credit 1 Dec 31, 2017 Interest expenseselected answer correct 3,420selected answer correct Interest payableselected answer correct not attempted^ 3,420selected answer correc 2 Feb 05, 2018 Notes payableselected answer correct^ 190,000selected answer correct Interest payableselected answer correct 3,420selected answer correct Interest expenseselected answer correct 2,280selected answer correct Cashselected answer correct not attempted

Merger Co. has 10 employees, each of whom earns $1,850 per month and

has been employed since January 1. FICA Social Security taxes are 6.2%

of the first $118,500 paid to each employee, and FICA Medicare taxes are

1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the

first $7,000 paid to each employee.

Prepare the March 31 journal entry to record the March payroll taxes

expenses. (Round your answers to 2 decimal places.)

No Date General Journal Debit 1 Mar 31 Payroll taxes expenseselected answer correct 2,525.25selected answer correct FICA—Social sec. taxes payableselected answer correct not attempted FICA—Medicare taxes payableselected answer not attempted

The payroll records of Speedy Software show the following information

about Marsha Gottschalk, an employee, for the weekly pay period ending

September 30, 2017. Gottschalk is single and claims one allowance.

Compute her Social Security tax (6.2%), Medicare tax (1.45%), federal

income tax withholding, state income tax (1.0%), and net pay for the

current pay period. (Use the withholding table in Exhibit

11A.6 ) (Round your final answers to 2 decimal places.)

Total (gross) earnings for current pay period $ 670

Cumulative earnings of previous pay periods $ 8,

Gross pay

670.00selected

answer correct

Social

security tax

deduction

$41.54selected

answer correct

Medicare tax

deduction

9.72selected

answer correct

Federal

income tax

deduction

78.00selected

answer correct

State income

tax deduction

6.70selected

answer correct

Total

deductions

Net pay $534.

Keesha Co. borrows $170,000 cash on November 1, 2017, by signing a 90-

day, 12% note with a face value of $170,000.

1. On what date does this note mature? (Assume that February has

28 days)

January 30, 2018.

2. & 3. What is the amount of interest expense in 2017 and 2018 from this

note? (Use 360 days a year. Round final answers to the

nearest whole dollar.)

4. Prepare journal entries to record (a) issuance of the note, (b) accrual of

interest at the end of 2017, and (c) payment of the note at

maturity. (Assume no reversing entries are made.) (Use 360 days a

year. Do not round intermediate calculations.)

No Transactio n General Journal Debit 1 (a) Cashselected answer correct 170,000selected answer correct Notes payableselected answer correct not attempted 170, 2 (b) Interest expenseselected answer correct 3,400selected answer correct Interest payableselected answer correct not attempted 3,400selected answer cor 3 (c) Interest expenseselected answer correct 1,700selected answer correct Interest payableselected answer correct 3,400selected answer correct Notes payableselected answer correct 170,000selected answer correct Cashselected answer correct not attempted

Lenny Florita, an unmarried employee, works 52 hours in the week ended

January 12. His pay rate is $12 per hour, and his wages are subject to no

deductions other than FICA Social Security, FICA Medicare, and federal

income taxes. He claims three withholding allowances. Compute his

regular pay, overtime pay (for this company, workers earn 150% of their

regular rate for hours in excess of 40 per week), and gross pay. Then

compute his FICA tax deduction (use 6.2% for the Social Security portion

and 1.45% for the Medicare portion), income tax deduction (use the wage

bracket withholding table from Exhibit 11A.6.), total deductions, and net

pay. (Round your intermediate calculations and

final answers to 2 decimal places.)