Toren Inc. employs one person to run its solar management company. The employee's gross income for the month of May is $8,000. Payroll for the month of May is as follows: FICA Social Security tax rate at 6.2%, FICA Medicare tax rate at 1.45%, federal income tax of $420, state income tax of $85, health-care insurance premium of $250, and union dues of $50. The employee is responsible for covering 30% of his or her health insurance premium. Toren Inc. have the following additional information: May is the first pay period for this employee. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,800 paid to the employee. FICA Social Security and FICA Medicare match employee deductions. The employer is responsible for 70% of the health insurance premium B. Record the payment in cash of all employer liabilities only on June 1. Round your answers to the nearest whole dollar. If an amount box does not require an entry, leave it blank. June 1 To recognize payment of accrued tax liabilities June 1 To recognize payment of accrued employee union liabilities June 1 To record payment of accrued employee benefit liabilities

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Toren Inc. employs one person to run its solar management company. The employee's gross income for the month of May is $8,000. Payroll for the month of May is as follows: FICA Social Security tax rate at 6.2%, FICA Medicare tax rate at 1.45%, federal income tax of $420, state income tax of $85, health-care insurance premium of $250, and union dues of $50. The employee is responsible for covering 30% of his or her health insurance premium.

Toren Inc. have the following additional information:

May is the first pay period for this employee. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,800 paid to the employee. FICA Social Security and FICA Medicare match employee deductions. The employer is responsible for 70% of the health insurance premium

B. Record the payment in cash of all employer liabilities only on June 1. Round your answers to the nearest whole dollar. If an amount box does not require an entry, leave it blank.

June 1






	To recognize payment of accrued tax liabilities
June 1

	To recognize payment of accrued employee union liabilities
June 1

	To record payment of accrued employee benefit liabilities

Following is the unadjusted trial balance for Sun Energy Co. on December 31, 2017.
Sun Energy Co.
Unadjusted Trial Balance
Year Ended December 31, 2017
Account
Debit
Credit
Cash
$5,000
Accounts Receivable
2,100
Merchandise Inventory
4,500
Buildings
2,400
Equipment
4,200
Accounts Payable
$4,700
Salaries Payable
3,500
Common Stock
2,500
Dividends
Sales Revenue
14,800
COGS
3,800
Salaries Expense
3,500
Totals
$25,500
$25,500
You are also given the following supplemental information:
• A pending lawsuit, claiming $2,500 in damages, is considered likely to favor the plaintiff and can be reasonably estimated. Sun Energy Co. believes a customer may
win a lawsuit for $3,500 in damages, but the outcome is only reasonably possible to occur. Sun Energy calculated warranty expense estimates of $210.

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