11. Paid the sales tax collected on $105,000 of the alarm sales. 12. Collected $
ID: 2575659 • Letter: 1
Question
11. Paid the sales tax collected on $105,000 of the alarm sales.
12. Collected $198,000 of accounts receivable during the year.
13. Paid installers and other employees a total of $96,000 for salaries for the year. Assume the Social Security tax rate is 6 percent and the Medicare tax rate is 1.5 percent. Federal income taxes withheld amounted to $10,600. No employee exceeded $110,000 in total wages. The net salaries were paid in cash.
14. On October 1, declared a dividend on the preferred stock and a $1 per share dividend on the common stock to be paid to shareholders of record on October 15, payable on November 1, 2021.
15. Paid $1,625 in warranty repairs during the year.
16. On November 1, 2021, paid the dividends that had been previously declared.
17. Paid $18,500 of advertising expense during the year.
18. Paid $6,100 of utilities expense for the year.
19. Paid $9,200 of the Employee Income Tax Payable, $5,280 of the FICA Tax – Soc. Sec. Tax Payable and $1,320 of the FICA Tax – Medicare Tax Payable. Also, paid the Payroll Tax Expense for the 7.5% employer matching of FICA taxes on $88,000 of salaries.
20. Paid the accounts payable.
21. Paid bond interest and amortized the discount. The bond was issued in 2020 and pays interest at 6 percent.
22. Paid the annual installment of $14,238 on the amortized note. The interest rate for the note is 7 percent. Adjustment
23. There was $190 of supplies on hand at the end of the year.
24. Recognized the uncollectible accounts expense for the year using the allowance method. Pacilio now estimates that 1 percent of sales on account will not be collected.
25. Recognized depreciation expense on the equipment, van, and building. The equipment, purchased in 2018, has a five-year life and a $2,000 salvage value. The van has a four-year life and a $6,000 salvage value. The building has a 40-year life and a $10,000 salvage value. The company uses straight-line for the equipment and the building. The van is fully depreciated.
26. The alarm systems sold in transaction 7 were covered with a one-year warranty. Pacilio estimated that the warranty cost would be 2 percent of alarm sales.
27. The unemployment tax on the three employees has not been paid. Record the accrued unemployment tax on the salaries for the year. The unemployment tax rate is 4.5 percent and gross wages for all three employees exceeded $7,000.
28. Recognized the employer Social Security and Medicare payroll tax that has not been paid on $8,000 of salaries expense.
Indicate whether the transaction increases (+), decreases (–), or increases and decreases (+/-) for each element of the financial statements. Also, in the Cash Flow column, use the letters OA to designate operating activity, IA for investing activity, FA for financing activity. The first transaction is recorded as an example.
Explanation / Answer
(Note: Question is visible from the 11th point onwards. Therefor answer is starting from 11th point onwards)
S.No Element of Financial statement Asset/liability/Expense / income Cashflow 11 Cash (-) asset OA Sale tax payable(-) liability 12 Cash (+) asset OA Accounts Receivable(-) asset 13 Cash(-) asset OA Salary(+) Expense Social Security Tax (+) Liabilities Medicare Tax (+) Federal Tax (+) 14 Dividend declared (+) Liability OA General Reserve(-) Equity 15 Cash(-) asset OA Warranty Repairs(-) Expense 16 Cash(-) asset OA Dividend declared (-) Liability 17 Cash(-) asset OA Advertisement Expense(+) Expense 18 Cash(-) asset OA Utility Expenses(+) Expense 19 Cash(-) asset OA Employee IncomeTax Payable(-) Liability FICA Tax Payable (-) Liability 20 Cash(-) asset OA Accounts Payable(-) Liability 21 Cash(-) asset FA Bond Interest (-) Expense Amortized Discount(-) Liability 22 Cash(-) asset FA Interest & Installment (-) Liability 23 NO Effect on Cash Flow 24 Provision for Bad debts (+) Liability OA Bad debts (+) Expense 25 Depreciation (+) Expense OA Equipment (-) asset Van (-) asset Building(-) asset 27 Unemployment Tax (+) Expense OA Unemployment Tax Payable(+) Liability 28 NO Effect on Cash FlowRelated Questions
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