Question 1a

The journal entry a company uses to record the estimated accrued product warranty liability is:

	debit Product Warranty Payable; credit Product Warranty Expense
	debit Product Warranty Expense; credit Product Warranty Payable

	debit Product Warranty Payable; credit Cash
	debit Product Warranty Expense; credit Cash

Question 1b

The cost of a product warranty should be included as an expense in the:

	future period when the product is repaired or replaced
	period of the sale of the product

	period the cash is collected for a product sold on account
	future period when the cost of repairing the product is paid

Question 1c

Most employers are required to withhold from employees for:

	only federal income tax
	both federal and state unemployment compensation tax

	only state unemployment compensation tax
	only federal unemployment compensation tax

Question 1d

An employee receives an hourly rate of $15, with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: hours worked, 48; federal income tax withheld, $120; social security tax rate, 6.0%; and Medicare tax rate, 1.5%; state unemployment compensation tax, 3.4% on the first $7,000; federal unemployment compensation tax, .8% on the first $7,000. The employee's cumulative earnings for the year prior to this week, $24,500. What is the net amount to be paid the employee?

	$574.90
	$601.50

	$660.00
	$568.74

Question 1e

During its first year of operations, a company granted employees vacation privileges and pension rights estimated at a cost of $20,500 and $15,000. The vacations are expected to be taken in the next year and the pension rights are expected to be paid in the future 5-30 years. What is the total cost of vacation pay and pension rights to be recognized in the first year?

	$23,500
	$35,500

	$29,500
	$20,500