The following information about the payroll for the week ended December 30 was obtained from the records of Pharrell Co.:
| Salaries: | |
| Sales salaries | $402,000 |
| Warehouse salaries | 210,000 |
| Office salaries | 165,000 |
| $777,000 | |
| Deductions: | |
| Income tax withheld | $135,975 |
| Social security tax withheld | 46,620 |
| Medicare tax withheld | 11,655 |
| Retirement savings | 17,094 |
| Group insurance | 13,986 |
| $225,330 | |
| Tax rates assumed: | |
| Social security | 6% |
| Medicare | 1.5% |
| State unemployment (employer only) | 5.4% |
| Federal unemployment (employer only) | 0.6% |
| Required: | |||||
| 1. | Assuming that the payroll for the last week of the year is to
be paid on December 31, journalize the following entries (refer to
the Chart of Accounts for exact wording of account titles):
|
||||
| 2. | Assuming that the payroll for the last week of the year is to
be paid on January 5 of the following fiscal year, journalize the
following entries (refer to the Chart of Accounts for exact wording
of account titles):
|
| CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pharrell Co. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pharrell Co. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
X
Journal
Scroll down to access additional pages of the journal.
| 1. | Assuming that the payroll for the last week of the year is to
be paid on December 31, journalize the following entries (refer to
the Chart of Accounts for exact wording of account titles):
|
PAGE 11
JOURNAL
ACCOUNTING EQUATION
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
|---|---|---|---|---|---|---|---|---|
|
1 |
| 2. | Assuming that the payroll for the last week of the year is to be paid on January 5 of the following fiscal year, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles): |
| A. On page 11 of the journal: December 30, to record the payroll. |
PAGE 11
JOURNAL
ACCOUNTING EQUATION
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
|---|---|---|---|---|---|---|---|---|
|
1 |
| B. On page 12 of the journal: January 5, to record the employer's payroll taxes on the payroll to be paid on January 5. Because it is a new fiscal year, all salaries are subject to unemployment compensation taxes. |
PAGE 12
JOURNAL
ACCOUNTING EQUATION
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
|---|---|---|---|---|---|---|---|---|
|
1 |
||||||||
In: Accounting
At July 31, Crane Company has this bank information: cash
balance per bank $8,360, outstanding checks $800, deposits in
transit $1,325 and a bank service charge $20.
Determine the adjusted cash balance per bank at July 31.
| The adjusted cash balance per bank at July 31 | $ |
In: Accounting
During April 2019 Kelly Consulting entered into the following
transactions:
Apr 2 Received cash from clients as an advance payment
for services to be provided in May for $ 3,500.
Apr 5 Received cash from clients on account, $
3,800.
Apr 9 Paid cash for a newspaper advertisement, $
300.
Apr 13 Paid Office Stationary Company for part of the
debt incurred last year, $ 400. When the office supplies were
initially purchased, they were on account.
Apr 15 Cash received for services provided $
8,500.
Apr 16 Paid part-time receptionist for two weeks’ salary including
the amount owing on March 31, 2008. The total payment was for $
750.
Apr 17 Recorded cash from cash clients for fees earned
during Apr 1-17 for $ 8,200.
Apr 20 Purchased supplies on account, $ 400.
Apr 21 Recorded services provided on account for the
period Apr 16 – 20, $ 3,900.
Apr 25 Recorded cash from cash clients for fees earned
for the period Apr 17-23, $ 5,100.
Apr 27 Received cash from clients on account, $
9,500.
Apr 28 Paid part-time receptionist for two weeks’
salary, $ 750.
Apr 29 Paid telephone bill for April, $ 120.
Apr 30 Paid electricity bill for April, $ 290.
Apr 30 Recorded cash from cash clients for fees earned
for the period Apr 26-30, $ 3,875.
Apr 30 Recorded services provided on account for the
remainder of April, $ 3,200.
Apr 30 Kelly withdrew $ 8,000 for personal use.
Instructions
Record the above transactions in the general journal. An
explanation line is not required.
Post the beginning account balance and all of April’s transactions
to T accounts. Prepare an unadjusted trial balance. Ensure debits
equal credits. Remember that the cash T account is quite large so
give yourself enough room.
At the end of April, the following adjustment data was assembled.
Journalize the adjusting entries in the general journal and post to
the T accounts. .
Apr 30 Insurance used up during April, $ 300.
Apr 30 Supplies remaining on hand at Apr 30th are $
600.
Apr 30 Office equipment depreciated during the month. Original cost
of equipment is $ 14,500. Equipment expected to last 3 years and
have a salvage value of $2,625. Calculate and record the monthly
depreciation amount rounded to full dollars.
Apr 30 Accrued receptionist salary on Apr 30th is $
240.
Apr 30 Rent expired (used up) during April was $
1,600.
Apr 30 Unearned fees remaining on April 30 are $
2,000.
Instructions (continued)
Prepare an unadjusted trial balance ensuring total debits equal
total credits.
Prepare an Income Statement, a Statement of Owner’s Equity and a
Balance Sheet.
Record the closing journal entries into the general journal and
post to the T Accounts. (Usually closing entries are completed at
year-end not after 1 month. I am trying to save you some
work).
Prepare a post-closing trial balance.
What is the current ratio at April 30th?
What is the acid-test ratio at April 30th?
In: Accounting
In your post please discuss the following:
If a taxpayer sells or exchanges property, what are items that could be included in the calculation of the "amount realized"?
In your own words, explain "adjusted basis", what affects adjusted basis, and the reason adjusted basis is important for determining one's tax liability?
What is meant by "realized gain" versus "recognized gain"
Briefly discuss how the tax status (e.g., capital, ordinary, Section 1231 business use) of an asset affect the tax treatment of a realized gain or realized loss.
In: Accounting
The Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing $51 million and having a four-year expected life, after which the assets can be salvaged for $10.2 million. In addition, the division has $51 million in assets that are not depreciable. After four years, the division will have $51 million available from these nondepreciable assets. This means that the division has invested $102 million in assets with a salvage value of $61.2 million. Annual depreciation is $10.2 million. Annual operating cash flows are $25 million. Depreciation is computed on a straight-line basis, recognizing the salvage values noted. Ignore taxes. Assume that the division uses beginning-of-year asset values in the denominator for computing ROI.
Required:
a. & b. Compute ROI, using net book value and gross book value. (Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1).)
| ROI | |||
| Net Book Value | Gross Book value | ||
| Year 1 | % | ||
| Year 2 | % | ||
| Year 3 | % | ||
| Year 4 | % | ||
In: Accounting
Statement of Cash Flows (Direct Method) The
Sweet Company’s income statement and comparative balance sheets as
of December 31 of 2016 and 2015 are presented below:
| SWEET COMPANY Income Statement For the Year Ended December 31, 2016 |
||
|---|---|---|
| Sales Revenue | $950,000 | |
| Cost of Goods Sold | $507,000 | |
| Wages Expense | 207,000 | |
| Depreciation Expense | 62,000 | |
| Insurance Expense | 13,000 | |
| Interest Expense | 12,000 | |
| Income Tax Expense | 57,000 | |
| Gain on Sale of Equipment | (16,000) | 842,000 |
| Net Income | $108,000 | |
| SWEET COMPANY Balance Sheets |
||
|---|---|---|
| Dec. 31, 2016 | Dec. 31, 2015 | |
| Assets | ||
| Cash | $32,000 | $33,000 |
| Accounts Receivable | 68,000 | 43,000 |
| Inventory | 177,000 | 126,000 |
| Prepaid Insurance | 9,000 | 11,000 |
| Plant Assets | 887,000 | 770,000 |
| Accumulated Depreciation | (191,000) | (175,000) |
| Total Assets | $982,000 | $808,000 |
| Liabilities and Stockholders’ Equity | ||
| Accounts Payable | $37,000 | $27,000 |
| Interest Payable | 5,000 | - |
| Income Tax Payable | 11,000 | 18,000 |
| Bonds Payable | 145,000 | 80,000 |
| Common Stock | 660,000 | 585,000 |
| Retained Earnings | 176,000 | 98,000 |
| Treasury Stock | (52,000) | - |
| Total Liabilities and Stockholders’ Equity | $982,000 | $808,000 |
During the year, Sweet Company sold equipment for $27,000 cash that
originally cost $57,000 and had $46,000 accumulated depreciation.
New equipment was purchased for cash. Bonds payable and common
stock were issued for cash. Cash dividends of $30,000 were declared
and paid. At the end of the year, shares of treasury stock were
purchased for cash. Accounts payable relate to merchandise
purchases.
Required
a. Compute the change in cash that occurred during 2016.
b. Prepare a statement of cash flows using the direct method.
a. Change in Cash during 2016 $Answer Answer Increase Decrease
b. Use a negative sign with cash outflow answers.
| SWEET COMPANY Statement of Cash Flows For Year Ended December 31, 2016 |
||
|---|---|---|
| Cash Flow from Operating Activities | ||
| Cash Received from Customers | $Answer | |
| Cash Paid for Merchandise Purchased | $Answer | |
| Cash Paid to Employees | Answer | |
| Cash Paid for Insurance | Answer | |
| Cash Paid for Interest | Answer | |
| Cash Paid as Income Taxes | Answer | Answer |
| Cash Provided by Operating Activities | Answer | |
| Cash Flow from Investing Activities | ||
| Sale of Equipment | Answer | |
| Purchase of Equipment | Answer | |
| Cash Used by Investing Activities | Answer | |
| Cash Flow from Financing Activities | ||
| Issuance of Bonds Payable | Answer | |
| Purchase of Common Stock | Answer | |
| Payment of Dividends | Answer | |
| Purchase of Treasury Stock | Answer | |
| Cash Provided by Financing Activities | Answer | |
| Net in Cash Answer Increase Decrease | Answer | |
| Cash at Beginning of Year | Answer | |
| Cash at End of Year | $Answer | |
In: Accounting
Jack and Jane are married and file a joint return for 2020. They have wage income of $150,000; net long-term capital gains of $20,000; net short-term capital gains of $5,000; corporate bond interest of $3,000; share of S corporation income of $8,000; cash distributions from the S corporation of $3,000; ordinary cash dividends of $6,000; qualifying cash dividends of $5,000; inheritance received from deceased aunt’s estate of $18,000; deductions for AGI (Adjusted Gross Income) of $11,000; itemized deductions of $26,000; tax credits of $2,000; and estimated tax payments and withholding of $22,000. Their applicable standard deduction is $24,800. Using the appropriate tax schedule, compute their tax due or refund. [Note – you must show and label all calculations, including the AGI, Taxable Income, and Tax Liability amounts.]
In: Accounting
|
|
||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In: Accounting
Julia bought a brand new puppy for $400. She purchased the puppy from Mary, a person who regularly sells puppies and has done so for a number of years. Julia took her new friend home but realized that he was not in the best of health. Already attached to him she did not return the puppy to Mary, but instead took him to the vet. Costing $2,400 in vet bills, the puppy was medically mended Julia then sued Mary for her $400 purchase price and $2,400 in vet bills, alleging breach of implied warranty of merchantability.
(1) Is this transaction governed under UCC article 2?
(2) Is barnes a merchant?
(3) if so, does an implied warranty of merchantability attach to this sale?
(4) What damages are available if this is a breach of the implied warranty of merchantability?
Please Explain
In: Accounting
what is the exposure to risk associated with a firm commitment to sell inventory that a fair value hedge is intended to reduce?
In: Accounting
Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division’s return on investment (ROI), which has been above 22% each of the last three years. Casey is considering a capital budgeting project that would require a $3,800,000 investment in equipment with a useful life of five years and no salvage value. Pigeon Company’s discount rate is 18%. The project would provide net operating income each year for five years as follows:
| Sales | $ | 3,700,000 | ||
| Variable expenses | 1,720,000 | |||
| Contribution margin | 1,980,000 | |||
| Fixed expenses: | ||||
| Advertising, salaries, and other fixed out-of-pocket costs |
$ | 730,000 | ||
| Depreciation | 760,000 | |||
| Total fixed expenses | 1,490,000 | |||
| Net operating income | $ | 490,000 | ||
Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables.
Required:
1. What is the project’s net present value?
2. What is the project’s internal rate of return to the nearest whole percent?
3. What is the project’s simple rate of return?
4-a. Would the company want Casey to pursue this investment opportunity?
4-b. Would Casey be inclined to pursue this investment opportunity?
In: Accounting
In: Accounting
The following information is available for ABC Corporation. All differences between book income and taxable income are related to depreciation ( a timing difference )
The tax rate is 20%
BOOK TAX
DEC.31 2017 100,000 70,000
DEC.31 2018 100,000 100,000
DEC.31 2019 100,000 130,000
Record the journal entries for taxes for each of the three years
In: Accounting
Peter runs his own bricklaying business and is considering hiring a full time worker. He will pay his employee a gross wage of $48,500 p.a. His employee is also entitled to 4 weeks paid annual leave and 10 public holidays (2 weeks total). He knows that he has to pay PAYG withholding tax out of the gross wage figure (calculation not required), and has been advised that he has to pay 1.85% in WorkSafe insurance.
a. If this will be Peter’s only employee, does he have to pay payroll tax?
b. Are there any other costs Peter needs to factor in? List and briefly explain.
c. Calculate (showing workings) the full cost to Peter of hiring the above worker.
d. If Peter gives his worker the work vehicle and allows him to use it for personal travel, does this get taxed as well? If so, who pays the tax? (2.5 marks)
In: Accounting
Steven's Battery Company has two service departments, Maintenance and Personnel. Maintenance Department costs of $320,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $80,000 are allocated based on the number of employees. The costs of operating departments A and B are $160,000 and $240,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows:
| Support Departments | Production Department | |||
| Maint Department | Personnel Department | A | B | |
| Budgeted Costs | $320,000 | $80,000 | $160,000 | $240,000 |
| Budgeted Maintenance hours | NA | 800 | 960 | 640 |
| Number of employees | 40 | NA | 160 | 480 |
Required
1-Allocate the costs of the service departments to the production departments using the direct method
2-Allocate the costs of the service departments to the production departments using the step-down method, if the service department with the highest percentage of interdepartmental support service is allocated first. (Round up)
In: Accounting