Problem 11-6BA (50 minutes)
June 15 FICA—Social Security Taxes Payable………………. 992
30 Office Salaries Expense………………………………………………………………………… 3,800
Shop Salaries Expense…………………………………………………………………………. 4,200
To record payroll for the period.
30 Salaries Payable…………………………………………………………………………………… 6,338
To record payment of payroll.*
*Check numbers are likely entered in the Payroll Register.
30 Payroll Taxes Expense*…………………………………………………………………………. 612
To record employer payroll taxes.
Problem 11-6BA (Concluded)
July 15 FICASocial Security Taxes Payable…………………………………………………… 992
To record payment of FICA and
federal income taxes.
To record payment of SUTA taxes.
To record payment of FUTA taxes.
31 No entry required upon mailing Form 941.
Serial Problem — SP 11
Serial Problem — SP 11, Business Solutions (30 minutes)
1.
Gross pay (8 days x $125 per day)……………………………. $1,000.00
FICA Social Security tax deduction (6.2%)*………………………………………………………. $ 62.00
*Employee has not reached the maximum limit.
2. 2016
To record payroll period.
3. 2016
Feb. 26 Payroll Taxes Expense…………………………………………………………………………..
122.50
4. 2016
Mar. 25 Accounts Receivable – Wildcat Services………………………………………………. 2,912
Sold merchandise on credit and collected sales tax of
4%.
Comprehensive Problem
Bug-Off Exterminators (100 minutes)
Part 1
a. Correct ending balance of cash and the amount of the omitted check
Balance per bank……………………………$15,100
Plus deposit in transit…………………….. 2,450
b. Allowance for doubtful accounts
Unadjusted balance……………………….. $ 828 credit
c. Depreciation expense on the truck
Cost…………………………………………………………..$32,000
Less salvage value…………………………………….. (8,000)
d. Depreciation expense on the equipment
Sprayer Injector
Cost………………………………………………. $27,000 $18,000
Comprehensive Problem (Continued)
e. Adjusted revenue and unearned revenue balances
Total advance received…………………………………. $ 3,840
Months in contract……………………………………….. 12
Extermination Services Revenue account
Unadjusted balance……………………………………… $60,000
Unearned Services Revenue account
Unadjusted balance……………………………………… $ 0
f. Warranty expense
g. Note payable and interest accrual
The note originated on December 31, 2015. The first time interest
Thus, the adjusted balance for both Interest Payable and Interest
Expense at December 31, 2015, is zero.
g.
Comprehensive Problem (Continued)
Part 2
BUG-OFF EXTERMINATORS
December 31, 2015
Unadjusted
Trial Balance Adjustments .
Adjusted
Trial Balance
Cash ……………………………….. $
17,000
(a) $1,250 $ 15,750
Accounts receivable…………… 4,000 (b1) 679 3,321
Allowance for
doubtful accounts……………. $ 828 (b1) $ 679 (b2) 551 $ 700
Merchandise inventory………..
11,700 11,700
Trucks………………………………
32,000 32,000
Comprehensive Problem (Continued)
Part 3
2015
(a) Miscellaneous Expenses……………………………………. 15
Accounts Payable……………………………………………… 1,287
Interest Revenue………………………………………….. 52
Cash……………………………………………………………. 1,250
Adjust cash account. (Separate entries are acceptable.)
Estimate warranty expense.
(g) No interest accrual required for 2015
Comprehensive Problem (Continued)
Part 4
BUG-OFF EXTERMINATORS
Income Statement
For Year Ended December 31, 2015
Revenues
Extermination services revenue…………… $57,760
Sales………………………………………………….. 71,026
Interest revenue………………………………….. 924
Total revenues……………………………………. $129,710
Expenses
BUG-OFF EXTERMINATORS
Statement of Owner’s Equity
For Year Ended December 31, 2015
D. Buggs, Capital, December 31, 2014…………………… $ 59,700
Add: Investments by owner………………………………… 0
Comprehensive Problem
Part 4 (concluded)
BUG-OFF EXTERMINATORS
Balance Sheet
December 31, 2015
Assets
Current assets
Cash……………………………………………………… $15,750
Accounts receivable……………………………….$ 3,321
Allowance for doubtful accounts…………….. (700) 2,621
Merchandise inventory…………………………… 11,700
Liabilities
Current liabilities
Accounts payable…………………………………..$ 3,713
Estimated warranty liability…………………….. 2,844
Reporting in Action — BTN 11-1
1. Times interest earned
($ millions) 2013 2012 2011
Net income…………………………………………$37,037 $41,733 $25,922
Add income taxes………………………………. 13,118 14,030 8,283
Add interest expense (actual for
a$50,291 / $136
b$55,863 / $100
c$34,305 / $100
Analysis comment : Apple reports interest expense of $136 million for
2013. Assuming Apple had interest expense of $100 million for 2012
2. Loyalty reward liabilities arise when a customer makes a purchase
under a frequent purchase program. It is an estimated liability as the
3. Total accrued expenses for 2013 equal $13,856. The six components
that make up accrued expenses are: Accrued warranty and related