Question
1. Federal Income Tax Withholding Bob Wolfe's weekly gross earnings for the present week were $2,290. Wolfe has four exemptions. Using the wage bracket withholding
1.
Federal Income Tax Withholding
Bob Wolfe's weekly gross earnings for the present week were $2,290. Wolfe has four exemptions. Using the wage bracket withholding table in Exhibit 2 with a $75 standard withholding allowance for each exemption, what is Wolfe's federal income tax withholding? Round your answer to two decimal places.
$
2.
Employee Net Pay
Maxwell McFarland's weekly gross earnings for the week ended April 22 were $1,906, and his federal income tax withholding was $343.08. Assuming the social security rate is 6% and Medicare is 1.5%, what is Maxwell's net pay?
Note: If required, round your answer to two decimal places. $
3.
Estimated Warranty Liability
Cook-Rite Co. sold $651,000 of equipment during January under a six-month warranty. The cost to repair defects under the warranty is estimated at 4% of the sales price. On August 15, a customer required a $274 part replacement, plus $101 of labor under the warranty.
Required:
(a) Provide the journal entry for the estimated warranty expense on January 31 for January sales.
Jan. 31 | |||
(b) Provide the journal entry for the August 15 warranty work. If an amount box does not require an entry, leave it blank.
Aug. 15 | |||
|
4.
Quick Ratio
Nabors Company reported the following current assets and liabilities for December 31 for two recent years:
Dec. 31, Current Year | Dec. 31, Previous Year | |||
Cash | $1,430 | $2,030 | ||
Temporary investments | 3,120 | 4,550 | ||
Accounts receivable | 6,500 | 3,110 | ||
Inventory | 2,340 | 2,300 | ||
Accounts payable | 6,500 | 5,100 |
Required:
a. Compute the quick ratio on December 31 of both years. If required, round your answers to one decimal place.
Quick Ratio | |
December 31, current year | |
December 31, previous year |
b. Is the quick ratio improving or declining?
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