7. For the past 3 years, Xavier, Inc., has failed to accrue unpaid wages earned by workers during the last week of the year. (The wages expense was recorded in the following year, when paid.) The amounts omitted, which are considered material, were as follows: December 31, 2018 December 31, 2019 December 31, 2020 $56,000 51,000 64,000 The entry on 12/31/20 to correct for these omissions would include a a. credit to wage expense for $64,000. credit to retained earnings for $64,000.A c. credit to retained earnings for $56,000. d. debit to wage expense for $13,000.

7. For the past 3 years, Xavier, Inc., has failed to accrue unpaid wages earned by workers during the last week of the year. (The wages expense was recorded in the following year, when paid.) The amounts omitted, which are considered material, were as follows: December 31, 2018 December 31, 2019 December 31, 2020 $56,000 51,000 64,000 The entry on 12/31/20 to correct for these omissions would include a a. credit to wage expense for $64,000. credit to retained earnings for $64,000.A c. credit to retained earnings for $56,000. d. debit to wage expense for $13,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Skip to question [The following information applies to the questions displayed below.]At March 31, 2019, the end of the first year of operations at Lukancic Inc., the firm’s accountant neglected to accrue payroll taxes of $6,370 that were applicable to payrolls for the year then ended. Exercise 7-7 (Algo) Part a - Horizontal Model Required:a-1. Use the horizontal model to show the effect of the accrual that should have been made as of March 31, 2019. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.)
Please do not give solution in image format ?
On 7 November 2021 there was a fire in the warehouse, in which inventory valued at $12,000 was destroyed. Under the terms of the insurance contract, the insurance company has stated that it will only pay out the first $3,000 of the claim. No entries have yet been made to record this. Make adjusting entries
In 2021, Winslow International, Inc.’s controller discovered that ending inventories for 2019 and 2020 were overstated by $220,000 and $520,000, respectively.Determine the effect of the errors on retained earnings at January 1, 2021. (Ignore income taxes.)
The payroll of Ivanhoe Company for September 2019 is as follows. Total payroll was $468,000, of which $104,000 is exempt from Social Security tax because it represented amounts paid in excess of $128,400 to certain employees. The amount paid to employees in excess of $7,000 (the maximum for both federal and state unemployment tax) was $406,000. Income taxes in the amount of $76,500 were withheld, as was $9,800 in union dues. The state unemployment tax is 3.5%, but Ivanhoe Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on an employee's wages to $128,400 and 1.45% in excess of $128,400. No employee for Ivanhoe makes more than $135,000. The federal unemployment tax rate is 0.8% after state credit. Prepare the necessary journal entries if the wages and salaries paid and the employer payroll taxes are recorded separately. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No…
Since the SUTA rates changes are made at the end of each year, the available 2019 rates were used for FUTA and SUTA. Note: For this textbook edition the rate 0.6% was used for the FUTA tax rate for employers. Example 5-5 Sutcliffe Company had taxable wages totaling $87,500. During the year, the company paid some of its state contributions after the January 31 cutoff of the following year. The penalty for tardiness is shown in the following calculation of the firm's net FUTA tax: Amount of gross FUTA tax ($87,500 × 6.0%) $5,250.00 State taxable wages $87,500 Sutcliffe's SUTA tax rate × 5.4% Sutcliffe's SUTA tax $ 4,725 Breakdown of Sutcliffe's SUTA tax payments: Before 1/31 cutoff—$3,000 × 100% credit (3,000.00) After 1/31 cutoff—$1,725 × 90% credit (1,552.50) Amount of net FUTA tax $ 697.50 If the company had made timely payments of its state contributions, the amount of its net FUTA tax would have been reduced to $525,…
In December of 2019, a company received consulting services of $100,000. No entry was recorded for these service in 2019. The invoice for the services was received in January 2020 and recorded by debiting consulting expense and crediting accounts payable. This error was discovered in 2020 and was determined to be a material error. What is the impact of the error on the net income of 2019 and 2020? Provide the proper correcting journal enntry assuming a 30% tax rate.
Faramarzinikpey Company, a public company, is preparing its annual financial statements on December 31, 2022. The following selected information is available: The company has been sued by an employee for discrimination. The employee is seeking $5,000,000 in damages. Legal counsel believes it is unlikely that the company will have to pay any damages. The amount is material ( substantial ) to the company. Employees have accrued ( earned ) $4,200 in vacation pay benefits as of December 31,2022. The company has been sued in a $ 3,000,000 product liability lawsuit. Legal counsel believes the company will probably have to pay the full amount. On October 1, 2022, the company signed a $ 10,000, 6-month, 8% note payable. No interest has been accrued to date. Instructions: Prepare any necessary adjusting entries or disclosures on December 31, 2022.
On January 1, 2021, a Dune Corporation truck was in an accident with an auto driven by R. Bell. Dune received notice on January 12, 2021, of a lawsuit for $700,000 in damages for personal injuries suffered by Bell. Dune Corporation’s legal counsel believes it is probable that Bell will be awarded an estimated amount in the range between $200,000 and $500,000, Dune’s accounting year ends on December 31, and the 2020 financial statements were issued on March 31, 2021. What amount of provision should Dune accrue on December 31, 2020?
69. Jackal Company's (a monthly depositor) tax liability (amount withheld from employees' wages for federal income tax and FICA tax plus the company's portion of the FICA tax) for July was $2,780. No deposit was made by the company until August 22, 20-- (7 days late). Determine the following: A. The date by which the deposit should have been made B. The penalty for failure to make timely deposit C. The penalty for failure to fully pay tax when due D. The interest on taxes due and unpaid (assume a 5% interest rate)
Do you want to make a double entry? On November 7, 2021, a fire broke out at the store, destroying merchandise worth $12,000. The insurance company has declared that it will only pay out the first $3,000 of the claim under the provisions of the contract. There haven't been any entries made yet to document this.
The payroll of Novak Company for September 2019 is as follows.Total payroll was $454,000, of which $122,000 is exempt from Social Security tax because it represented amounts paid in excess of $128,400 to certain employees. The amount paid to employees in excess of $7,000 (the maximum for both federal and state unemployment tax) was $399,000. Income taxes in the amount of $73,400 were withheld, as was $9,800 in union dues. The state unemployment tax is 3.5%, but Novak Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on an employee’s wages to $128,400 and 1.45% in excess of $128,400. No employee for Novakmakes more than $135,000. The federal unemployment tax rate is 0.8% after state credit.Prepare the necessary journal entries if the wages and salaries paid and the employer payroll taxes are recorded separately.