Question

1.

Calculate Payroll

Breakin Away 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	$2,410 per week		$30 per hour		$48 per hour
Overtime earnings rate	Not applicable		1.5 times hourly rate		2 times hourly rate
Number of withholding allowances	3		2		1

For the current pay period, the computer programmer worked 60 hours and the administrator worked 50 hours. The federal income tax withheld for all three employees, who are single, can be determined by adding $356.90 to 28% of the difference between the employee's amount subject to withholding and $1,796.00. Assume further that the social security tax rate was 6%, the Medicare tax rate was 1.5%, and one withholding allowance is $70.

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	$	$	$

2.

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	$64,700
	3. Total earnings	?
Deductions:
	4. Social security tax	25,920
	5. Medicare tax	6,480
	6. Income tax withheld	110,000
	7. Medical insurance	14,900
	8. Union dues	?
	9. Total deductions	160,000
	10. Net amount paid	272,000
Accounts debited:
	11. Factory Wages	229,000
	12. Sales Salaries	?
	13. Office Salaries	86,400

a. Calculate the amounts omitted in lines (1), (3), (8), and (12).

(1)	$
(3)	$
(8)	$
(12)	$

b. Journalize the entry to record the payroll accrual. If an amount box does not require an entry, leave it blank.

c. Journalize the entry to record the payment of the payroll.

3.

Quick Ratio

Gmeiner Co. had the following current assets and liabilities on December 31 of two recent years:

				Current Year		Previous Year
Current assets:
	Cash			$525,000		$571,000
	Accounts receivable			465,000		269,000
	Inventory			287,000		227,000
		Total current assets		$1,277,000		$1,067,000
Current liabilities:
	Current portion of long-term debt			$72,000		$63,000
	Accounts payable			144,000		126,000
	Accrued and other current liabilities			234,000		231,000
		Total current liabilities		$450,000		$420,000

a. Determine the quick ratio for December 31 of both years. If required, round your answers to one decimal place.

	Quick Ratio
Previous year:
Current year:

I put 2.2 & 2 and there was a decrease but that was incorrect. I am not sure exactly what I am doing wrong.

b. How did the quick ratio change between the two balance sheet dates?
Decreased

Answer 1