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Vacation Pay and Pension Benefits Regling Company provides its employees vacation benefits and a defined benefit pension plan. Employees earned vacation pay of $40,000 for the period. The pension formula calculated a pension cost of $222,750. Only $185,000 was contributed to the pension plan administrator. (a) Provide the journal entry for the vacation pay. If an amount box does not require an entry, leave it blank. Vacation Pay Expense Vacation Pay Payable Feedback (b) Provide the journal entry for the pension benefit. If an amount box does not require an entry, leave it blank. Pension Expense Cash 111 110 Unfunded Pension Liability Current Liabilities Bon Nebo Co. sold 15,000 annual subscriptions of Bjorn for $51 during December 20Y5. These new subscribers will receive monthly issues, beginning in January 20Y6. In addition, the business had taxable income of $480,000 during the first calendar quarter of 20Y6. The federal tax rate is 38%. A quarterly tax payment will be made on April 12, 2016. Prepare the "Current liabilities" section of the balance sheet for Bon Nebo Co. on March 31, 20Y6. Bon Nebo Co. Current Liabilities Section of Balance Sheet March 31, 2016 Current liabilities: Advances on magazine subscriptions Federal income taxes payable Total current liabilities Calculate Payroll An employee earns $40 per hour and 1.5 times that rate for all hours in excess of 40 hours per week. If the employee worked 60 hours during the week. Assume that the social security tax rate is 6.0%, the Medicare tax rate is 1.5%, and the employee's federal income tax withheld is $644. a. Determine the gross pay for the week. If applicable, round your final answer to two decimal places. b. Determine the net pay for the week. Calculate Payroll K. Mello Company has three employees-a consultant, a computer programmer, and an administrator. The following payroll information is available for each employee: Consultant Computer Programmer Administrator Regular earnings rate $2,110 per week $28 per hour $42 per hour Overtime earnings rate Not applicable 2 times hourly rate 1.5 times hourly rate Federal income tax withheld $930 $257 $500 For hourly employees, overtime is paid for hours worked in excess of 40 hours per week. For the current pay period, the computer programmer worked 52 hours and the administrator worked 65 hours. Assume further that the social security tax rate was 6%, and the Medicare tax rate was 1.5%. Determine the gross pay and the net pay for each of the three employees for the current pay period. Assume the normal working hours in a week are 40 hours. If required, round your answers to two decimal places. Consultant Computer Programmer Administrator Gross pay $ Net pay Summary Payroll Data In the following summary of data for a payroll period, some amounts have been intentionally omitted: ? Earnings: 1. At regular rate 2. At overtime rate 3. Total earnings Deductions: $80,000 ? 4. Social security tax 5. Medicare tax Income tax withheld (32,400) (8,100) (135,000) (18,900) ? 7. Medical insurance 8. Union dues (201,150) $338,850 9. Total deductions 10. Net amount paid Accounts debited: 11. Factory Wages 12. Sales Salaries 13. Office Salaries 285,000 ? 120,000 a. Calculate the amounts omitted in lines (1), (3), (8), and (12). Assume that the social security tax rate was 6.0% and the Medicare tax rate was 1.5%. ), , . (1) SI (3) $ (8) $ (12) $ Feedback b. Journalize the entry to record the payroll accrual. If an amount box does not require an entry, leave it blank. Factory Wages Expense Sales Salaries Expense Office Salaries Expense Social Security Tax Payable Medicare Tax Payable Employees Income Tax Payable Medical Insurance Payable v Union Dues Payable Salaries Payable Feedback c. Journalize the entry to record the payment of the payroll. If an amount box does not require an entry, leave it blank. Salaries Payable Cash Payroll Entries The payroll register for D. Salah Company for the week ended May 18 indicated the following: Salaries $578,000 Federal income tax 115,600 withheld The salaries were all subject to the 6.0% social security tax and the 1.5% Medicare tax. In addition, state and federal unemployment taxes were calculated at the rate of 5.4% and 0.8%, respectively, on $11,000 of salaries. If an amount box does not require an entry, leave it blank. a. Journalize the entry to record the payroll for the week of May 18. May 18 Salaries Expense Social Security Tax Payable Medicare Tax Payable Employees Federal Income Tax Payable Salaries Payable Feedback b. Journalize the entry to record the payroll tax expense incurred for the week of May 18. May 18 Payroll Tax Expense Social Security Tax Payable Medicare Tax Payable State Unemployment Tax Payable Federal Unemployment Tax Payable Payroll Entries Widmer Company had gross wages of $296,000 during the week ended June 17. The amount of wages subject to social security tax was $266,400, while the amount of wages subject to federal and state unemployment taxes was $37,000. Tax rates are as follows: Social security 6.0% Medicare 1.5% State 5.4% unemployment Federal 0.8% unemployment The total amount withheld from employee wages for federal taxes was $59,200. If an amount box does not require an entry, leave it blank. If required, round answers to two decimal places. a. Journalize the entry to record the payroll for the week of June 17. June 7 Wages Expense Social Security Tax Payable Medicare Tax Payable Employees Federal Income Tax Payable Wages Payable Feedback b. Journalize the entry to record the payroll tax expense incurred for the week of June 17 June 7 Payroll Tax Expense Social Security Tax Payable Medicare Tax Payable State Unemployment Tax Payable Federal Unemployment Tax Payable Accrued Product Warranty Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 3% of sales. Assume that sales were $401,000 for January. On February 7, a customer received warranty repairs requiring $150 of parts and $90 of labor. a. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. If an amount box does not require an entry, leave it blank. Product Warranty Expense Product Warranty Payable Feedback February. If an amount box does require an entry, leave it blank. b. Journalize the entry to record the warranty work provided Product Warranty Payable Supplies Wages Payable Evaluating alternative notes A borrower has two alternatives for a loan: (1) issue a $300,000, 60-day, 7% note or (2) issue a $300,000, 60-day note that the creditor discounts at 7%. Assume a 360-day year. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet a. Calculate the amount of the interest expense for each option. Round your answer to the nearest dollar. for each alternative. $ b. Determine the proceeds received by the borrower in each alternative. Round your answers to the nearest dollar. (1) $300,000, 60-day, 7% interest-bearing note: $ (2) $300,000, 60-day note discounted at 7%: $ c. Alternative 1 is more favorable to the borrower because the borrower receives more cash Entries for discounted note payable A business issued a 120-day note for $51,000 to a bank. The note was discounted at 9%. Assume a 360-day year. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. x Open spreadsheet a. Journalize the entry to record the issuance of the note. Record debits first, then credits. If an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar. Account Debit Credit Cash Interest Expense Notes Payable b. Journalize the entry to record the payment of the note at maturity. Record debits first, then credits. If an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar Debit Credit Account Notes Payable Cash Vacation Pay and Pension Benefits Regling Company provides its employees vacation benefits and a defined benefit pension plan. Employees earned vacation pay of $40,000 for the period. The pension formula calculated a pension cost of $222,750. Only $185,000 was contributed to the pension plan administrator. (a) Provide the journal entry for the vacation pay. If an amount box does not require an entry, leave it blank. Vacation Pay Expense Vacation Pay Payable Feedback (b) Provide the journal entry for the pension benefit. If an amount box does not require an entry, leave it blank. Pension Expense Cash 111 110 Unfunded Pension Liability Current Liabilities Bon Nebo Co. sold 15,000 annual subscriptions of Bjorn for $51 during December 20Y5. These new subscribers will receive monthly issues, beginning in January 20Y6. In addition, the business had taxable income of $480,000 during the first calendar quarter of 20Y6. The federal tax rate is 38%. A quarterly tax payment will be made on April 12, 2016. Prepare the "Current liabilities" section of the balance sheet for Bon Nebo Co. on March 31, 20Y6. Bon Nebo Co. Current Liabilities Section of Balance Sheet March 31, 2016 Current liabilities: Advances on magazine subscriptions Federal income taxes payable Total current liabilities Calculate Payroll An employee earns $40 per hour and 1.5 times that rate for all hours in excess of 40 hours per week. If the employee worked 60 hours during the week. Assume that the social security tax rate is 6.0%, the Medicare tax rate is 1.5%, and the employee's federal income tax withheld is $644. a. Determine the gross pay for the week. If applicable, round your final answer to two decimal places. b. Determine the net pay for the week. Calculate Payroll K. Mello Company has three employees-a consultant, a computer programmer, and an administrator. The following payroll information is available for each employee: Consultant Computer Programmer Administrator Regular earnings rate $2,110 per week $28 per hour $42 per hour Overtime earnings rate Not applicable 2 times hourly rate 1.5 times hourly rate Federal income tax withheld $930 $257 $500 For hourly employees, overtime is paid for hours worked in excess of 40 hours per week. For the current pay period, the computer programmer worked 52 hours and the administrator worked 65 hours. Assume further that the social security tax rate was 6%, and the Medicare tax rate was 1.5%. Determine the gross pay and the net pay for each of the three employees for the current pay period. Assume the normal working hours in a week are 40 hours. If required, round your answers to two decimal places. Consultant Computer Programmer Administrator Gross pay $ Net pay Summary Payroll Data In the following summary of data for a payroll period, some amounts have been intentionally omitted: ? Earnings: 1. At regular rate 2. At overtime rate 3. Total earnings Deductions: $80,000 ? 4. Social security tax 5. Medicare tax Income tax withheld (32,400) (8,100) (135,000) (18,900) ? 7. Medical insurance 8. Union dues (201,150) $338,850 9. Total deductions 10. Net amount paid Accounts debited: 11. Factory Wages 12. Sales Salaries 13. Office Salaries 285,000 ? 120,000 a. Calculate the amounts omitted in lines (1), (3), (8), and (12). Assume that the social security tax rate was 6.0% and the Medicare tax rate was 1.5%. ), , . (1) SI (3) $ (8) $ (12) $ Feedback b. Journalize the entry to record the payroll accrual. If an amount box does not require an entry, leave it blank. Factory Wages Expense Sales Salaries Expense Office Salaries Expense Social Security Tax Payable Medicare Tax Payable Employees Income Tax Payable Medical Insurance Payable v Union Dues Payable Salaries Payable Feedback c. Journalize the entry to record the payment of the payroll. If an amount box does not require an entry, leave it blank. Salaries Payable Cash Payroll Entries The payroll register for D. Salah Company for the week ended May 18 indicated the following: Salaries $578,000 Federal income tax 115,600 withheld The salaries were all subject to the 6.0% social security tax and the 1.5% Medicare tax. In addition, state and federal unemployment taxes were calculated at the rate of 5.4% and 0.8%, respectively, on $11,000 of salaries. If an amount box does not require an entry, leave it blank. a. Journalize the entry to record the payroll for the week of May 18. May 18 Salaries Expense Social Security Tax Payable Medicare Tax Payable Employees Federal Income Tax Payable Salaries Payable Feedback b. Journalize the entry to record the payroll tax expense incurred for the week of May 18. May 18 Payroll Tax Expense Social Security Tax Payable Medicare Tax Payable State Unemployment Tax Payable Federal Unemployment Tax Payable Payroll Entries Widmer Company had gross wages of $296,000 during the week ended June 17. The amount of wages subject to social security tax was $266,400, while the amount of wages subject to federal and state unemployment taxes was $37,000. Tax rates are as follows: Social security 6.0% Medicare 1.5% State 5.4% unemployment Federal 0.8% unemployment The total amount withheld from employee wages for federal taxes was $59,200. If an amount box does not require an entry, leave it blank. If required, round answers to two decimal places. a. Journalize the entry to record the payroll for the week of June 17. June 7 Wages Expense Social Security Tax Payable Medicare Tax Payable Employees Federal Income Tax Payable Wages Payable Feedback b. Journalize the entry to record the payroll tax expense incurred for the week of June 17 June 7 Payroll Tax Expense Social Security Tax Payable Medicare Tax Payable State Unemployment Tax Payable Federal Unemployment Tax Payable Accrued Product Warranty Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 3% of sales. Assume that sales were $401,000 for January. On February 7, a customer received warranty repairs requiring $150 of parts and $90 of labor. a. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. If an amount box does not require an entry, leave it blank. Product Warranty Expense Product Warranty Payable Feedback February. If an amount box does require an entry, leave it blank. b. Journalize the entry to record the warranty work provided Product Warranty Payable Supplies Wages Payable Evaluating alternative notes A borrower has two alternatives for a loan: (1) issue a $300,000, 60-day, 7% note or (2) issue a $300,000, 60-day note that the creditor discounts at 7%. Assume a 360-day year. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet a. Calculate the amount of the interest expense for each option. Round your answer to the nearest dollar. for each alternative. $ b. Determine the proceeds received by the borrower in each alternative. Round your answers to the nearest dollar. (1) $300,000, 60-day, 7% interest-bearing note: $ (2) $300,000, 60-day note discounted at 7%: $ c. Alternative 1 is more favorable to the borrower because the borrower receives more cash Entries for discounted note payable A business issued a 120-day note for $51,000 to a bank. The note was discounted at 9%. Assume a 360-day year. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. x Open spreadsheet a. Journalize the entry to record the issuance of the note. Record debits first, then credits. If an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar. Account Debit Credit Cash Interest Expense Notes Payable b. Journalize the entry to record the payment of the note at maturity. Record debits first, then credits. If an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar Debit Credit Account Notes Payable Cash
