Finanical Acct - Chapter 13

Jenny Sawh
Chapter 13
13-8, 13-11, 13-19
December 10, 2012

DR CR
Salaries and Wages Expense $480, 000
Withholding Taxes Payable $80,000
FICA Taxes Payable $28,040
Union Dues Payable $9,000
Cash [($480,000 – $140,000) X 7.65% = $26,010] $362,960 Payroll Tax Expense $29,440
FICA Taxes Payable
$140,000 X 1.45% = $2,030; $26,010 + $2,030 = $28,040 $28,040
FUTA Taxes Payable
[($480,000 – $410,000) X .8%) $560
SUTA Taxes Payable
[$70,000 X (3.5% – 2.3%)] $840

a. DR CR
Cash $3,000,000 Sales Revenue (500 X $6,000) $3,000,000
Warranty Expense $30,000 Inventory $30,000
Warranty Expense $90,000 Warranty Liability ($120,000 - $30,000) $90,000 b.
Cash $3,000,000 Sales Revenue $2,840,000 Unearned Warranty Revenue $160,000
Warranty Expense $30,000 Inventory $30,000
Unearned Warranty Revenue $40,000 Warranty Expense ($160,000X($30,000/$120,000)) $40,000

a.
1. $318,000 / $87,000 = 3.66 times
2. $820,000 / ($200,000 + $170,000)/2 = 4.43 times (82 days)
3. $1,400,000 / $95,000 = 14.74 times (25 Days)
4. $210,000 /52,000 = $4.04
5. $210,000 /$1,400,000 = 15.0%
6. $210,000 / $488,000 = 43.03%
b.
1. No effect on current ratio, if already included in the allowance for doubtful accounts.
2. Weaken current ratio by reducing current assets.
3. Improve current ratio by reducing current assets and current liabilities by a like amount.
4. No effect on current ratio.
5. Weaken current ratio by increasing current liabilities.
6. No effect on current