Compute the amount of workers’ compensation insurance, Company U withheld from its full-time and part-time employees for the month of July.

Question

For the past 10 years, Prince Company (Prince) has owned 75,000 or 75% of the common shares of Stiff Inc. (Stiff). Elizabeth Winer owns another 20% and the other 5% are widely held. Although Prince has the controlling interest, you would never know it during the annual shareholders’ meetings. Winer keeps the board of directors on its toes by asking a lot of tough questions and continually threatening legal action if her rights as a minority shareholder are not protected. Rick Impatient owns 100% of the shares of Prince. After Prince’s latest shareholders’ meeting, he decided that Prince would offer to purchase Winer’s shares in Stiff or Prince would sell its interest in Stiff because Impatient is tired of all of the heckling from Winer. The shares of Stiff were recently trading for $50 per share. On November 13, Year 13, Prince offered to pay $54 per share to Winer for her 20% interest in Stiff. To Impatient’s surprise, Winer accepted the offer and the transaction was consummated on…

Answer 1

Question

Chapter 6, Problem 13PB

a.

To determine

Compute the amount of workers’ compensation insurance, Company U withheld from its full-time and part-time employees for the month of July.

b.

To determine

Mention the title used to credit the amount withheld from employees’ earnings.

c.

To determine

Prepare the journal entry to record the employer’s liability for workers’ compensation insurance as on July 31.

d.

To determine

Prepare the journal entry to record the payment of the workers’ compensation insurance withheld and the employer’s liability to the insurance carrier for as on August 15.

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For the past 10 years, Prince Company (Prince) has owned 75,000 or 75% of the common shares of Stiff Inc. (Stiff). Elizabeth Winer owns another 20% and the other 5% are widely held. Although Prince has the controlling interest, you would never know it during the annual shareholders’ meetings. Winer keeps the board of directors on its toes by asking a lot of tough questions and continually threatening legal action if her rights as a minority shareholder are not protected. Rick Impatient owns 100% of the shares of Prince. After Prince’s latest shareholders’ meeting, he decided that Prince would offer to purchase Winer’s shares in Stiff or Prince would sell its interest in Stiff because Impatient is tired of all of the heckling from Winer. The shares of Stiff were recently trading for $50 per share. On November 13, Year 13, Prince offered to pay $54 per share to Winer for her 20% interest in Stiff. To Impatient’s surprise, Winer accepted the offer and the transaction was consummated on…

What is the amount of interest expense on July 1?

Redmond Industries bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below: • • Estimated machine-hours = 21,500 Estimated variable manufacturing overhead = $8.25 per machine-hour Estimated total fixed manufacturing overhead $495,000 Actual machine-hours for the year = 22,800 = What is the predetermined overhead rate for the recently completed year?

Answer 2

Question

Chapter 6, Problem 13PB

a.

To determine

Compute the amount of workers’ compensation insurance, Company U withheld from its full-time and part-time employees for the month of July.

b.

To determine

Mention the title used to credit the amount withheld from employees’ earnings.

c.

To determine

Prepare the journal entry to record the employer’s liability for workers’ compensation insurance as on July 31.

d.

To determine

Prepare the journal entry to record the payment of the workers’ compensation insurance withheld and the employer’s liability to the insurance carrier for as on August 15.

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Answer 3

Question

Chapter 6, Problem 13PB

a.

To determine

Compute the amount of workers’ compensation insurance, Company U withheld from its full-time and part-time employees for the month of July.

b.

To determine

Mention the title used to credit the amount withheld from employees’ earnings.

c.

To determine

Prepare the journal entry to record the employer’s liability for workers’ compensation insurance as on July 31.

d.

To determine

Prepare the journal entry to record the payment of the workers’ compensation insurance withheld and the employer’s liability to the insurance carrier for as on August 15.

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Answer 4

Question

Chapter 6, Problem 13PB

a.

To determine

Compute the amount of workers’ compensation insurance, Company U withheld from its full-time and part-time employees for the month of July.

b.

To determine

Mention the title used to credit the amount withheld from employees’ earnings.

c.

To determine

Prepare the journal entry to record the employer’s liability for workers’ compensation insurance as on July 31.

d.

To determine

Prepare the journal entry to record the payment of the workers’ compensation insurance withheld and the employer’s liability to the insurance carrier for as on August 15.

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 13PB

a.

To determine

Compute the amount of workers’ compensation insurance, Company U withheld from its full-time and part-time employees for the month of July.

b.

To determine

Mention the title used to credit the amount withheld from employees’ earnings.

c.

To determine

Prepare the journal entry to record the employer’s liability for workers’ compensation insurance as on July 31.

d.

To determine

Prepare the journal entry to record the payment of the workers’ compensation insurance withheld and the employer’s liability to the insurance carrier for as on August 15.

Answer 6

Chapter 6, Problem 13PB

a.

To determine

Compute the amount of workers’ compensation insurance, Company U withheld from its full-time and part-time employees for the month of July.

Answer 7

Chapter 6, Problem 13PB

a.

To determine

Compute the amount of workers’ compensation insurance, Company U withheld from its full-time and part-time employees for the month of July.

Answer 8

b.

To determine

Mention the title used to credit the amount withheld from employees’ earnings.

Answer 9

b.

To determine

Mention the title used to credit the amount withheld from employees’ earnings.

Answer 10

c.

To determine

Prepare the journal entry to record the employer’s liability for workers’ compensation insurance as on July 31.

Answer 11

c.

To determine

Prepare the journal entry to record the employer’s liability for workers’ compensation insurance as on July 31.

Answer 12

d.

To determine

Prepare the journal entry to record the payment of the workers’ compensation insurance withheld and the employer’s liability to the insurance carrier for as on August 15.

Answer 13

d.

To determine

Prepare the journal entry to record the payment of the workers’ compensation insurance withheld and the employer’s liability to the insurance carrier for as on August 15.

Answer 14

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Compute the amount of workers’ compensation insurance, Company U withheld from its full-time and part-time employees for the month of July.

Solution Summary: The author calculates the amount of workers' compensation insurance, Company U withheld from its employees for the month of July.

Compute the amount of workers’ compensation insurance, Company U withheld from its full-time and part-time employees for the month of July.

Mention the title used to credit the amount withheld from employees’ earnings.

Prepare the journal entry to record the employer’s liability for workers’ compensation insurance as on July 31.

Prepare the journal entry to record the payment of the workers’ compensation insurance withheld and the employer’s liability to the insurance carrier for as on August 15.

Chapter 6 Solutions