1) Explain the debt ratio and its use in analyzing a company’s financial condition.
2) A company’s payroll information for the month of May follows:
On May 31 the company issued Check No. 335 payable to the Payroll Bank Account to
pay for the May payroll. It issued payroll checks to the employees after depositing the
check.
(1) Prepare the journal entry to record (accrue) the employer’s payroll for May. (2)
Prepare the journal entry to record payment of the May payroll. The federal and state
unemployment tax rates are 0.8% and 5.4%, respectively, on the first $7,000 paid to
each employee. The wages and salaries subject to these taxes were $6,000. (3) Prepare
the journal entry to record the employer’s payroll taxes.
3) A partner can be admitted into a partnership by ________________________ or by
___________________________.
4) A company records its transactions and events in four special journals and a general
journal. The company completed the following transactions a through j. Identify the
journal in which each transaction should be recorded.
5) A company uses a sales journal, purchases journal, cash receipts journal, cash
disbursements journal, and general journal. A perpetual inventory system is used. The
following transactions were completed by the company during the current month of
October:
Record these transactions in the appropriate journal shown below.
6) Apply the retail method to the following company information to calculate the cost
of the ending inventory for the current period.
7) A __________________________ helps control costs and expenses and evaluates
managers’ performance by assigning costs and expenses to the managers responsible for
controlling them.
8) Identify the four steps in the budgetary control process.