Hello, please help me understand the following 7 questions. Thank you kindly for
ID: 2749438 • Letter: H
Question
Hello, please help me understand the following 7 questions. Thank you kindly for your time and your generous help.
1)
A company estimates that warranty expense will be 5% of sales. The company's sales for the current period are $73,000. The current period's entry to record the warranty expense is:
Debit Warranty Expense $3,650; credit Estimated Warranty Liability $3,650.
Debit Estimated Warranty Liability $3,650; credit Warranty Expense $3,650.
Debit Estimated Warranty Liability $3,650;credit Cash $3,650.
Debit Warranty Expense $3,650; credit Sales $3,650.
No entry is recorded until the items are returned for warranty repairs.
2)
An employee earned $60,800 during the year working for an employer. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. What is the amount of total unemployment taxes the employee must pay?
$101.50
$56.00
$378.00
$434.00
$0.00
3)
Employees earn vacation pay at the rate of one day per month. During the month of July, 35 employees qualify for one vacation day each. Their average daily wage is $110 per day. What is the amount of vacation benefit expense to be recorded for the month of July?
$38,500.0
$3,850.0
$35.0
$385.0
$110.0
4)
A payroll register does not include:
Pay period dates.
Hours worked.
Gross pay and net pay.
Deductions.
Employer tax expenses.
5)
The Federal Insurance Contributions Act (FICA) requires that each employer file a:
W-4.
Form 941.
Form 1040.
Form 1099.
W-2.
6)
A disadvantage of bond financing is:
Bonds do not affect owners' control.
Interest on bonds is tax deductible.
Bonds can increase return on equity.
It allows firms to trade on the equity.
Bonds pay periodic interest and the repayment of par value at maturity.
7)
A bondholder that owns a $1,000, 10%, 10-year bond has:
Ownership rights in the issuing company.
The right to receive $10 per year until maturity.
The right to receive $1,000 at maturity.
The right to receive $10,000 at maturity.
The right to receive dividends of $1,000 per year.
1)
A company estimates that warranty expense will be 5% of sales. The company's sales for the current period are $73,000. The current period's entry to record the warranty expense is:
Explanation / Answer
1 Sales 73,000 Warranty estimate 5% 3,650 So Warranty Expense recording : Dr Warranty Expense 3,650 Cr Estimated Warranty Liability 3,650 First statement is true 2 Unemployment Taxes are not deducted from employees So Amount of deduction from employees =0 3 Vacation days 35 Average wage per day 110 Total vacation expense July 3,850 4 A payroll register does not include employer tax expenses. 5 FICA requires each employer files a Form 941. 6 A disadvantage of bond financing is that Bonds pay periodic interest and repayment of par value at maturity. 7 A bond holder that holds $1000 , 10% 10 years bond , has the right to receive $1,000 at maturity.
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