You’ve just started your first accounting job, as the accounts payable and payroll clerk for Copperfield and Company, a provider of delicate wine glasses to restaurants. Your predecessor left the job suddenly, and was not able to complete all the tasks before leaving. You need to get up to speed and complete the unfinished tasks as soon as possible. Your tasks on your first day are the following: 1. Review the Payroll Journal entries made by your predecessor. 2. Compute the relevant amounts for the company’s short-term note payable and determine whether your predecessor’s journal entries are correct. 3. Confirm the journal entry for this year’s payment on an installment note. 4. Make a recommendation as to whether the company should journalize any warranty expense for the month. You decide to get started - the sooner the better! The following Payroll Journal entries for Oct. 15 were made by your predecessor. For FICA tax, assume that the social security rate is 6.0% and the Medicare rate is 1.5%. The state and federal unemployment tax rates are 5.4% and 0.8%, respectively. The company offers 401k plans to employees. Review the journal entries, then answer the questions that follow. PAGE 32 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Oct. 15 Sales Salaries Expense 123,000.00 ↓ 2 Officers Salaries Expense 442,800.00 ↓ 3 Office Salaries Expense 82,000.00 ↓ 4 Factory Wages Expense 172,200.00 ↓ 5 Social Security Tax Payable 49,200.00 ↑ 6 Medicare Tax Payable 12,300.00 ↑ 7 Employees Federal Income Tax Payable 147,600.00 ↑ 8 Medical Insurance Payable 90,200.00 ↑ 9 Retirement Contributions Payable 123,000.00 ↑ 10 Salaries Payable 397,700.00 ↑ 11 15 Payroll Tax Expense 62,864.00 ↓ 12 Social Security Tax Payable 49,200.00 ↑ 13 Medicare Tax Payable 12,300.00 ↑ 14 Federal Unemployment Tax Payable 176.00 ↑ 15 State Unemployment Tax Payable 1,188.00 ↑ 16 15 Pension Expense 73,800.00 ↓ 17 Cash 73,800.00 ↓ In order to confirm the previous clerk’s payroll calculations, you have been asked to supply the following amounts based on your review of the payroll entries. These amounts will be checked against the company records and investigated further if necessary. 1. Determine the payroll amount subject to federal and state unemployment taxes in this payroll. 2. What is the total payroll for Copperfield and Company shown in these journal entries? 3. What is Copperfield and Company’s share of FICA taxes in this payroll? 4. How much has Copperfield and Company contributed to employee 401k plans in this pay

You’ve just started your first accounting job, as the accounts payable and payroll clerk for Copperfield and Company, a provider of delicate wine glasses to restaurants. Your predecessor left the job suddenly, and was not able to complete all the tasks before leaving. You need to get up to speed and complete the unfinished tasks as soon as possible. Your tasks on your first day are the following: 1. Review the Payroll Journal entries made by your predecessor. 2. Compute the relevant amounts for the company’s short-term note payable and determine whether your predecessor’s journal entries are correct. 3. Confirm the journal entry for this year’s payment on an installment note. 4. Make a recommendation as to whether the company should journalize any warranty expense for the month. You decide to get started - the sooner the better! The following Payroll Journal entries for Oct. 15 were made by your predecessor. For FICA tax, assume that the social security rate is 6.0% and the Medicare rate is 1.5%. The state and federal unemployment tax rates are 5.4% and 0.8%, respectively. The company offers 401k plans to employees. Review the journal entries, then answer the questions that follow. PAGE 32 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Oct. 15 Sales Salaries Expense 123,000.00 ↓ 2 Officers Salaries Expense 442,800.00 ↓ 3 Office Salaries Expense 82,000.00 ↓ 4 Factory Wages Expense 172,200.00 ↓ 5 Social Security Tax Payable 49,200.00 ↑ 6 Medicare Tax Payable 12,300.00 ↑ 7 Employees Federal Income Tax Payable 147,600.00 ↑ 8 Medical Insurance Payable 90,200.00 ↑ 9 Retirement Contributions Payable 123,000.00 ↑ 10 Salaries Payable 397,700.00 ↑ 11 15 Payroll Tax Expense 62,864.00 ↓ 12 Social Security Tax Payable 49,200.00 ↑ 13 Medicare Tax Payable 12,300.00 ↑ 14 Federal Unemployment Tax Payable 176.00 ↑ 15 State Unemployment Tax Payable 1,188.00 ↑ 16 15 Pension Expense 73,800.00 ↓ 17 Cash 73,800.00 ↓ In order to confirm the previous clerk’s payroll calculations, you have been asked to supply the following amounts based on your review of the payroll entries. These amounts will be checked against the company records and investigated further if necessary. 1. Determine the payroll amount subject to federal and state unemployment taxes in this payroll. 2. What is the total payroll for Copperfield and Company shown in these journal entries? 3. What is Copperfield and Company’s share of FICA taxes in this payroll? 4. How much has Copperfield and Company contributed to employee 401k plans in this pay

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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Question

Your tasks on your first day are the following:

1. Review the Payroll Journal entries made by your predecessor.

2. Compute the relevant amounts for the company’s short-term note payable and determine whether your predecessor’s journal entries are correct.

3. Confirm the journal entry for this year’s payment on an installment note.

4. Make a recommendation as to whether the company should journalize any warranty expense for the month.

You decide to get started - the sooner the better!

The following Payroll Journal entries for Oct. 15 were made by your predecessor. For FICA tax, assume that the social security rate is 6.0% and the Medicare rate is 1.5%. The state and federal unemployment tax rates are 5.4% and 0.8%, respectively. The company offers 401k plans to employees. Review the journal entries, then answer the questions that follow.

PAGE 32

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1	Oct. 15	Sales Salaries Expense	123,000.00				↓
2		Officers Salaries Expense	442,800.00				↓
3		Office Salaries Expense	82,000.00				↓
4		Factory Wages Expense	172,200.00				↓
5		Social Security Tax Payable		49,200.00		↑
6		Medicare Tax Payable		12,300.00		↑
7		Employees Federal Income Tax Payable		147,600.00		↑
8		Medical Insurance Payable		90,200.00		↑
9		Retirement Contributions Payable		123,000.00		↑
10		Salaries Payable		397,700.00		↑
11	15	Payroll Tax Expense	62,864.00				↓
12		Social Security Tax Payable		49,200.00		↑
13		Medicare Tax Payable		12,300.00		↑
14		Federal Unemployment Tax Payable		176.00		↑
15		State Unemployment Tax Payable		1,188.00		↑
16	15	Pension Expense	73,800.00				↓
17		Cash		73,800.00	↓

In order to confirm the previous clerk’s payroll calculations, you have been asked to supply the following amounts based on your review of the payroll entries. These amounts will be checked against the company records and investigated further if necessary.

1. Determine the payroll amount subject to federal and state unemployment taxes in this payroll.

2. What is the total payroll for Copperfield and Company shown in these journal entries?

3. What is Copperfield and Company’s share of FICA taxes in this payroll?

4. How much has Copperfield and Company contributed to employee 401k plans in this payroll?

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