Problem 11-6AA (Concluded)
Apr. 15 FICASocial Security Taxes Payable…………………………………………………… 3,472
15 State Unemployment Taxes Payable…………………………………………………….. 2,800
30 Federal Unemployment Taxes Payable………………………………………………… 420
30 No entry required upon mailing Form 941.
PROBLEM SET B
Problem 11-1B (45 minutes)
Fox
Products
Spring
Bank
City
Bank
1. Maturity dates
Date of the note………………………….May 23 July 15 Dec. 6
2. Interest due at maturity
Principal of the note……………………$4,600 $12,000 $8,000
3. Accrued interest on City Bank note at the end of 2014
Total interest for note……………………………………………………… $ 90
4. Interest in 2015
Total interest for note……………………………………………………… $ 90
Problem 11-1B (Concluded)
5.
2014
Apr. 22 Merchandise Inventory……………………………………. 5,000
May 23 Accounts PayableFox Products…………………….. 5,000
Cash…………………………………………………………. 400
July 15 Cash………………………………………………………………. 12,000
22 Interest Expense…………………………………………….. 115
Notes PayableFox Products…………………………… 4,600
Nov. 12 Interest Expense…………………………………………….. 400
Dec. 6 Cash………………………………………………………………. 8,000
31 Interest Expense…………………………………………….. 50
2015
Jan. 20 Interest Expense…………………………………………….. 40
Problem 11-2B (25 minutes)
Part 1
Jan. 8 Sales Salaries Expense………………………………………………………………………….34,745.00
Office Salaries Expense…………………………………………………………………………21,225.00
Delivery Salaries Expense……………………………………………………………………. 1,030.00
To record payroll for period.
Part 2
Jan. 8 Payroll Taxes Expense………………………………………………………………………….. 6,640.50
FICA—Social Security Taxes Payable……………………………………………. 3,534.00
Problem 11-3B (60 minutes)
1. Each employee’s FICA withholdings for Social Security
Ahmed Carlos June Marie Total
Maximum base…………….$117,000 $ 117,00
0
$117,000 $117,000
Earned through 9/23……. 115,400 115,485 6,650 22,200
2. Each employee’s FICA withholdings for Medicare (no limits)
Ahmed Carlos June Marie Total
Earned this week………… $ 2,500 $ 1,515 $ 475 $ 1,000
3. Employer’s FICA taxes for Social Security
Ahmed Carlos June Marie Total
4. Employer’s FICA taxes for Medicare
Ahmed Carlos June Marie Total
Problem 11-3B (Concluded)
5. Employer’s FUTA taxes
Ahmed Carlos June Marie Total
Maximum base……….. $ 7,000 $ 7,000 $ 7,000 $ 7,000
Earned through 9/23… 115,400 115,485 6,650 22,200
6. Employer’s SUTA taxes
Ahmed Carlos June Marie Total
Subject to tax (from 5). $ 0 $ 0 $ 350 $ 0
7. Each employee’s net (take-home pay)
Ahmed Carlos June Marie Total
Gross earnings………… $2,500.00 $1,515.00 $475.00 $1,000.00 $5,490.00
Less
FICA Social Sec. tax.... (99.20) (93.93) (29.45) (62.00) (284.58)
8. Employer’s total payroll-related expense for each employee
Ahmed Carlos June Marie Total
Gross earnings………… $2,500.00 $1,515.00 $475.00 $1,000.00 $5,490.00
Plus
FICA Social Sec. tax.... 99.20 93.93 29.45 62.00 284.58
FICA Medicare taxes. . . 36.25 21.97 6.89 14.50 79.61
Problem 11-4B (40 minutes)
1.
2015
Nov. 16 Cash………………………………………………………………. 2,500
Sales………………………………………………………… 2,500
Sold coffee grinders to customers.
30 Warranty Expense…………………………………………… 250
Dec. 12 Estimated Warranty Liability……………………………. 144
18 Cash………………………………………………………………. 10,000
Sold coffee grinders to customers.
18 Cost of Goods Sold………………………………………… 4,800
28 Estimated Warranty Liability……………………………. 408
To record cost of coffee grinder
31 Warranty Expense…………………………………………… 1,000
Estimated Warranty Liability………………………. 1,000
Problem 11-4B (Concluded)
2016
Jan. 7 Cash………………………………………………………………. 2,000
Sales………………………………………………………… 2,000
Sold coffee grinders to customers.
7 Cost of Goods Sold………………………………………… 960
Merchandise Inventory………………………………. 960
2. Warranty expense for November 2015 and December 2015
Sales Percent Warranty Expense
November……………………. $ 2,500 10% $ 250
3. Warranty expense for January 2016
Sales in January……………………….. $2,000
4. Balance of the estimated liability as of December 31, 2015
Warranty expense for November…………………………….. $ 250 credit
5. Balance of the estimated liability as of January 31, 2016
Beginning balance…………………………………………………. $ 698 credit
Problem 11-5B (60 minutes)
1. Ellis Company
3. Sales increase by 10% (multiply prior sales by 1.10)
Ellis Co. Seidel Co.
Sales………………………………… $264,000 $264,000
Variable expenses……………… 132,000 198,000
4. Sales increase by 40% (multiply prior sales by 1.40)
Ellis Co. Seidel Co.
Sales………………………………… $336,000 $336,000
5. Sales increase by 90% (multiply prior sales by 1.90)
Ellis Co. Seidel Co.
Sales………………………………… $456,000 $456,000
Problem 11-5B (Concluded)
6. Sales decrease by 20% (multiply prior sales by 0.80)
Ellis Co. Seidel Co.
Sales………………………………… $192,000 $192,000
Variable expenses……………… 96,000 144,000
7. Sales decrease by 50% (multiply prior sales by 0.50)
Ellis Co. Seidel Co.
Sales………………………………… $120,000 $120,000
Variable expenses……………… 60,000 90,000
8. Sales decrease by 80% (multiply prior sales by 0.20)
Ellis Co. Seidel Co.
Sales………………………………… $ 48,000 $ 48,000
Variable expenses……………… 24,000 36,000
9. The higher fixed cost strategy (having more fixed interest expense) of
Ellis Co. accentuates the effects of increases and decreases in sales.
The higher fixed cost strategy works fine if the sales level increases.
The lower fixed cost strategy protects the company if the sales level