13. The following totals for the month of April were taken from the payroll register of Main Company; Salaries FICA taxes withhelod Income taxes withheld Medical insurance deductions Federal Unemployment Taxes State Unemployment Taxes $24,000 1,100 5,000 900 64 432 The entry to record accrual of employer's a. debit to Payroll Tax Expense for $496 b. debit to Payroll Tax Expense for $1,596. c. credit to FICA Taxes Payable for $2,200. d. credit to Payroll Tax Expense for $4 payroll taxes would include a standpoint of the issuing company, a disadvantage of using bonds as a means of long-term financing is that a. bond interest is deductible for tax purposes. b. interest must be paid on a periodic basis regardess of earings income to stockholders may increase as a result of trading on the equity d. c. the bondholders do not have voting rights. 15. The interest charged on a $200,000 note payable at the rate of 8%, on a 90-day note would be a. $16,000 b. $8,888. c. $4,000 d. $1,333 16. John Jackson purchases a house with a 30 year fixed mortgage with 360 equal monthly payments of $1,800. Which of the following statements best describes the behavior over time of the components of equal mortgage payments of $1,800? a. The proportion of interest expense to payment of principal remains the same. b. Interest expense increases and payment of principal decreases. c. Payment of principal increases and interest expense decreases. d. Both payment of principal and interest expense decrease. A successful grocery store would probably have a. a low inventory turnover. b. a high inventory turnover. c. zero profit margin. d. low volume. Which one of the following would not be considered an advantage of the corporate form ot rganization? Limited liability of owners Separate legal existence Continuous life Government regulation Part I (40 points) For each multiple choice question, select the one best answer and mark the appropriate box on the Scantron form. Gomel Corporation issues 800, 10-year, 896, $1,000 bonds dated January 1, 2015, at 96. The journ entry to record the issuance will show a a. debit to Cash of $800,000. b. credit to Discount on Bonds Payable for $32,000. c. credit to Bonds Payable for $768,000. d. 1. debit to Cash for $768,000. 2. Liquidity ratios measure a company's a. operating eycle. b. revenue-producing ability c. short-term debt paying ability. d. long-range solvency. 3. The amount of sales tax collected by a retail store when making sales is a. a miscellaneous revenue for the store. b. a current liability not recorded because it is a tax paid by the customer. c. d. recorded as an operating expense. 4. Goodwill can be recorded a. when customers kee p returning because they are satisfied with the company's products. b. when the company acquires a good location for its business. c. when the company has exceptional management. d. only when a company purchases another existing business. If Morgan Company issues 2,000 shares of $5 par value common stock for $140,000, the account a. Common Stock will be credited for $140,000. b. Paid-in Capital in Excess of Par Value will be credited for $10,000. c. Paid-in Capital in Excess of Par Value will be credited for $130,000. d. Cash will be debited for $130,000. Stock dividends and stock splits have the following effects on retained earnings: Stock Splits Stock Dividends a. Increase b. No change c. Decrease d. No change Decrease No change Page 1 of 11 pUuI a Concrete slab or 1ew machinery? c. $221,520 d. $202,000 8. Failure to record depreci a. Current b. ation expense causes which of the following to occur liabilities are understated. assets are not affected and Current assets are overstated and retained earnings is overstated c. Current assets are not affected and retained eamings is d. Curren nt assets are overstated and retained earnings is understated. 9. A company sells a plant asset that originally The accumulated de depreciation. The company should recognize a a. $100,000 loss on disposal. b. $40,000 gain on disposal. c. $40,000 loss on disposal. d. $25,000 loss on disposal. cost $150,000 for $50,000 on December 31, 2015. preciation account had a balance of $60,000, which includes the current year's 10. Assume the following sales data for a company: 2012.. .$900,000 20 11... $8$40,000 If 2010 is the base year, what is the a. 125% b. 167% c. 25% d. 20% percentage increase in sales from 2010 to 2011? 11. Given the following account balances at year balance sheet of Fiorella Enterprises. end, compute the total intangible assets on the Cash Accounts Receivable Trademarks Goodwill Research &Development Costs $1,500,000 4,000,000 1,000,000 4,500,000 2,000,000 a. $11,500,000 b. $7,500,000 c. $5,500,000 d. $9,500,000 ay 1, 2015, Wagner Company purchased a patent for $75,00. It is estimated that the patent will live a useful life of 5 years, and a 20-year legal life. The amount of Amortization Expense recognized for the 2015 would be a. $15,000 b. $10,000. C. $7,500. d. $3,750 year Page 2 of 11