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?