Question
Stone Corporation has 25 employees and incurs total wages and salaries expense of $1,000,000 per year. The following table shows various payroll amounts as a
Stone Corporation has 25 employees and incurs total wages and salaries expense of $1,000,000 per year. The following table shows various payroll amounts as a percentage of this annual wage and salaries expense:
Workers compensation insurance | 5% |
Social security and Medicare (employees' share and Employer's share combined) | 15.3% |
Pension and other postretirement costs expense (paid by employer) | 5% |
Personal income taxes withheld | 10% |
Unemployment taxes expense | 2% |
In addition, Stone provides group health insurance for its entire workforce. The cost of this insurance is $400 per month for each employee. |
19
Required information
Employees' annual "take-home-pay," totals approximately: |
$900,000.
$880,000.
$583,500.
$823,500.
Q..Sanford Corporation borrowed $240,000 by issuing a 17%, six-month note payable, all due at the maturity date. After one month, the company's total liability for this loan amounts to:
$240,000.
$241,700.
$243,400.
$246,800.
Q1. On September 1, 2015, Able Company purchased a building from Regal Corporation by paying $280,000 cash and issuing a one-year note payable for the balance of the purchase price. Interest on the note is stated at an annual rate of 8% and is paid at maturity. In its December 31, 2015, balance sheet, Able correctly presented the note and interest payable as follows:
Interest payable | $6,800 |
Notes payable, 8%, due September 1, 2016 | $255,000 |
17.
Required information
What is the amount of the interest expense Able will recognize on this note in 2016? |
$20,400.
$6,800.
$13,600.
$11,900.
2.The interest coverage ratio is computed by dividing:
Net income by interest expense.
Operating income by interest expense.
Interest expense by net income.
Interest expense by operating income.
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