PA2. Stork Enterprises delivers care packages for special occasions. They charge $45 for a small package and $80 for a large package. The sales tax rate is 6%. During the month of May, Stork delivers 38 small packages and 22 large packages. A. What is the total tax charged to the customer per small package? What is the overall charge per small package? B. What is the total tax charged to the customer per large package? What is the overall charge per large package? C. How much sales tax liability does Stork Enterprises have for the month of May? D. What accounts are used to recognize this tax situation for the month of May? E. When Stork remits payment to the sales tax governing body, what happens to the sales tax liability?
PA2. Stork Enterprises delivers care packages for special occasions. They charge $45 for a small
package and $80 for a large package. The sales tax rate is 6%. During the month of May, Stork delivers 38
small packages and 22 large packages.
A. What is the total tax charged to the customer per small package? What is the overall charge per small
package?
B. What is the total tax charged to the customer per large package? What is the overall charge per large
package?
C. How much sales tax liability does Stork Enterprises have for the month of May?
D. What accounts are used to recognize this tax situation for the month of May?
E. When Stork remits payment to the sales tax governing body, what happens to the sales tax liability?
PA5. Review the following transactions and prepare any necessary
A. On July 16, Arrow Corp. purchases 200 computers (Equipment) at $500 per computer from a supplier,
on credit. The terms of the purchase are 4/10, n/50 from the invoice date of July 16.
B. On August 10, Hondo Inc. receives an advance cash payment from a client for legal services in the amount
of $9,000. Hondo had yet to provide legal services as of August 10.
C. On September 22, Jack Pies sells thirty pies for $25 cash per pie. The sales tax rate is 8%.
D. On November 8, More Supplies paid a portion of their noncurrent note in the amount of $3,250 cash.
PA9. Mohammed LLC is a growing consulting firm. The following transactions take place during the
current year.
A. On June 10, Mohammed borrows $270,000 from a bank to cover the initial cost of expansion. Terms of
the loan is payment due in four months from June 10, with and an annual interest rate of 5%.
B. On July 9, Mohammed borrows an additional $100,000 with payment due in four months from July 9,
and an annual interest rate of 12%.
C. Mohammed pays their accounts in full on October 10 for the June 10 loan, and on November 9 for the
July 9 loan.
PA11. Record the journal entries for each of the following payroll transactions.
Apr. 2 Paid $650 and $340 cash to a federal depository for FICA Social Security and FICA Medicare,
respectively
Apr. 4 Paid accumulated employee salaries of $15,220
Apr. 11 Issued checks in the amounts of $480 for federal income tax and $300 for state income tax to an
IRS-approved bank
Apr. 14 Paid cash to the health insurance carrier for total outstanding health insurance liability of $800
Apr. 22 Remitted cash payments for FUTA and SUTA to federal and state
amounts of $130 and $250, respectively
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