Problem 8-4B Record payroll (LO8-3) Emily Turnbull, president of Aerobic Equipment Corporation, is concerned about her employees' well-being. The company offers its employees free medical, dental, and life insurance coverage. It also matches employee contributions to a voluntary retirement plan up to 5% of their salaries. Assume that no employee's cumulative wages exceed the relevant wage bases. Payroll information for the biweekly payroll period ending January 24 is listed below. Wages and salaries Employee contribution to voluntary retirement plan Medical insurance premiums paid by employer Dental insurance premiums paid by employer Life insurance premiums paid by employer Federal and state income tax withheld FICA tax rate Federal and state unemployment tax rate $1,900,000 95,000 38,000 13,300 6,650 408,500 7.65% 6.20% Required: 1., 2. & 3. Record the necessary journal entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) X Answer is not complete. No 1 Date January 24 General Journal Salaries Expense Income Tax Payable Accounts Payable (Retirement Plan) Salaries Payable FICA Tax Payable Debit Credit 1,900,00 408,500 95,000 3 1,251,15 145,350 2 January 24 1,900,00 Salaries Expense Accounts Payable (Medical Insurance) 38,000 13,300 Accounts Payable (Dental Insurance) Accounts Payable (Life Insurance) Accounts Paya (Retirement Plan) SOLO 6,650 95,000 3 January 24 Payroll Tax Expense FICA Tax Payable Unemployment Tax Payable 308,750X 145,350 Problem 8-7B Record contingencies (LO8-5) Compact Electronics is a leading manufacturer of digital camera equipment. Assume the following transactions occur during the year ended December 31, 2021. 1. Accounts receivable were $27.5 million (all credit) at the end of 2021. Although no specific customer accounts have been shown to be uncollectible, the company estimates that 2% of accounts receivable will eventually prove uncollectible. 2. Compact Electronics is the plaintiff in a $3.5 million lawsuit filed against a supplier. The suit is in final appeal, and attorneys advise it is virtually certain that Compact Electronics will win and be awarded $2 million. 3. In November 2021, Compact Electronics became aware of a design flaw in one of its digital camera models. A product recall appears probable and would likely cost the company $450,000. 4. Compact Electronics is the defendant in a patent infringement lawsuit brought by a competitor. It appears reasonably likely Compact Electronics will lose the case, and potential losses are estimated to be in the range of $1 to $2 million. Required: Record any amounts as a result of each of these contingencies. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.) View transaction list Journal entry worksheet 1 2 3 4 > Record the estimated uncollectible accounts. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry View general journal Clear entry Problem 11-7B Calculate operating activities-direct method (LO11-4, 11-5, 11-7) The income statement, balance sheets, and additional information for Virtual Gaming Systems are provided. VIRTUAL GAMING SYSTEMS Income Statement For the Year Ended December 31, 2021 Net sales $2,420,000 Gain on sale of land 6,000 Total revenues 2,426,000 Expenses: Cost of goods sold $1,560,000 Operating expenses 597,000 Depreciation expense 15,000 Interest expense 16,000 Income tax expense 62,000 Total expenses 2,250,000 Net income $ 176,000 2020 $ 29,760 82,000 127,000 4,440 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2021 Assets Current assets: Cash $ 84,280 Accounts receivable 67,800 Inventory 133,000 Prepaid rent 2,920 Long-term assets: Investments 177,000 Land 208,000 Equipment 214,000 Accumulated depreciation (116,000) Total assets $ 771,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 26,000 Interest payable 3,200 Income tax payable 30,800 Long-term liabilities: Notes payable 255,000 Stockholders' equity: Common stock 262,000 Retained earnings 194,000 Total liabilities and stockholders' $ 771,000 equity 100,000 254,000 202,000 (101, 000) $ 698, 200 $ 80,000 2,200 33,000 243,000 220,000 120,000 $ 698, 200 Additional Information for 2021: 1. Purchase additional investment in stocks for $77,000. 2. Sell land costing $46,000 for $52,000, resulting in a $6,000 gain on sale of land. 3. Purchase $12,000 in equipment by issuing a $12,000 long-term note payable to the seller. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $102,000. 5. Issue common stock for $42,000. Required: Prepare the statement of cash flows for Virtual Gaming Systems using the direct method. Disclose any noncash transactions in an accompanying note. (List cash outflows and any decrease in cash as negative amounts.) Required: Prepare the statement of cash flows for Virtual Gaming Systems using the direct method. Disclose any noncash transactions in an accompanying note. (List cash outflows and any decrease in cash as negative amounts.) Answer is not complete. VIRTUAL GAMING SYSTEMS Statement of Cash Flows For the Year Ended December 31, 2021 Cash Flows from Operating Activities: Cash paid to suppliers Cash paid for income taxes Cash paid for interest Cash paid for operating expenses Cash received from customers ss $ 0 Net cash flows from operating activities Cash Flows from Investing Activities: Purchase investment in stock Proceeds from sale of land (77,000) 52,000 (25,000) Net cash flows from investing activities Cash Flows from Financing Activities: Payment of cash dividends Issue common stock 3 (102,000) 42,000 Net cash flows from financing activities Net increase in cash Cash at the beginning of the period Cash at the end of the period Note: Noncash Activities Purchase equipment issuing a note payable (60,000) 54,520 29,760 $ 84,280 $ 12,000