Copperfield and Company You've just started your first accounting job, as the accounts payable and payroll clerk for Copperfield and Company, a provider of delicate wine glasses to restaurants. Your predecessor left the job suddenly, and was not able to complete all the tasks before leaving. You need to get up to speed and complete the unfinished tasks as soon as possible. Your tasks on your first day are the following: 1. Review the Payroll Journal entries made by your predecessor. 2. Compute the relevant amounts for the company's short-term note payable and determine whether your predecessor's journal entries are correct. 3. Confirm the journal entry for this year's payment on an installment note. 4. Make a recommendation as to whether the company should journalize any warranty expense for the month. You decide to get started - the sooner the better!CHART OF ACCOUNTS Copperfield and Company General Ledger ASSETS REVENUE 110 Cash 410 Sales 112 Accounts Receivable 610 Interest Revenue 113 Interest Receivable 114 Notes Receivable EXPENSES 115 Inventory 510 Cost of Goods Sold 117 Supplies 520 Sales Salaries Expense 118 Prepaid Insurance 521 Factory Wages Expense 120 Land 522 Officers Salaries Expense 123 Building 523 Delivery Expense 124 Accumulated Depreciation-Building 524 Depreciation Expense-Building 125 Office Equipment 526 Repairs Expense 126 Accumulated Depreciation-Office Equipment 529 Selling Expenses 530 Office Salaries Expense LIABILITIES 531 Rent Expense 210 Accounts Payable 532 Depreciation Expense-Office Equipment 211 Salaries Payable 533 Insurance Expense 213 Interest Payable 534 Supplies Expense 215 Notes Payable 535 Payroll Tax Expense 216 Social Security Tax Payable 536 Pension Expense 217 Medicare Tax Payable 538 Cash Short and Over 218 Employees Federal Income Tax Payable 539 Product Warranty Expense 219 Employees State Income Tax Payable 540 Miscellaneous Expense 220 Retirement Contributions Payable 710 Interest Expense 221 Charitable Contributions Payable 222 Medical Insurance Payable 224 Federal Unemployment Tax Payable 225 State Unemployment Tax Payable 228 Product Warranty Payable224 Federal Unemployment Tax Payable 225 State Unemployment Tax Payable 228 Product Warranty Payable EQUITY 310 Common Stock 311 Retained Earnings 312 DividendsThe following Payroll Journal entries for Oct. 15 were made by your predecessor. For FICA tax, assume that the social security rate is 6.0% and the Medicare rate is 1.5%. The state and federal unemployment tax rates are 5.4% and 0.8%, respectively. The company offers 401k plans to employees. Review the journal entries, then answer the questions that follow. PAGE 32 JOURNAL ACCOUNTING FOUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY Oct. 15 Sales Salaries Expense 85,500.00 Officers Salaries Expense 307,800.00 Office Salaries Expense 57,000.00 Factory Wages Expense 119,700.00 + Social Security Tax Payable 34,200.00 T Medicare Tax Payable 8,550.00 Employees Federal Income Tax Payable 102,600.00 T Medical Insurance Payable 62,700.00 Retirement Contributions Payable 85,500.00 Salaries Payable 276,450.00 11 15 Payroll Tax Expense 44,176.00 Social Security Tax Payable 34,200.00 Medicare Tax Payable 8,550.00 Federal Unemployment Tax Payable 184.00 State Unemployment Tax Payable 1,242.00 15 Pension Expense 39,900.00 Cash 39,900.00In order to confirm the previous clerk's payroll calculations, you have been asked to supply the following amounts based on your review of the payroll entries. These amounts will be checked against the company records and investigated further if necessary. 1. Determine the payroll amount subject to federal and state unemployment taxes in this payroll. $21,500 2. What is the total payroll for Copperfield and Company shown in these journal entries? $648,283 3. What is Copperfield and Company's share of FICA taxes in this payroll? $42,750 4. How much has Copperfield and Company contributed to employee 401k plans in this payroll? $34,200Short-Term Note Payable Copperfield and Company issued a 90-day, 5.00% note for $190,000 to a creditor on account. The previous clerk entered the following journal entries to record the note on July 10, and the payment of the note at maturity. PAGE 25 JOURNAL ACCOUNTING FOUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Jul. 10 Accounts Payable 190,000.00 Notes Payable 190,000.00 Notes Payable 199,500.00 Accounts Payable 190,000.00 Interest Expense 9,500.00 You notice that the journal entry for recording the note on July 10 is correct, but the entry for the payment of the note at maturity (including interest) did not have a date and was not correct. Journalize the payment of the note at maturity as it should have been journalized. Don't forget to include the date. Assume a 360-day year. PAGE 25 JOURNAL ACCOUNTING FOULATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Oct. 8 Interest Expense 2,375.00 Notes Payable 190,000.00 Cash 192,375.00Installment Note The following journal entry was made by your predecessor to record the annual payment on a 5%, 10-year installment note. PAGE 22 JOURNAL ACCOUNTING FOLLATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Oct. 1 Interest Expense 710 152,086.00 7 Notes Payable 215 550,476.00 Cash 110 702,562.00 Using the information provided, compute the following amounts. 1. What was the carrying amount (book value) of the installment note before the payment on October 1? $3,041,720 2. What portion of next year's payment will be interest? (Round the amount to the nearest dollar.) $124,562