Type
Solution Manual
Book Title
Financial Accounting Fundamentals 5th Edition
ISBN 13
978-0078025754

978-0078025754 Chapter 9 Solution Manual Part 2

March 26, 2020
Exercise 9-17 (concluded)
(b)
Aug 31
Salaries (or Wages) Expense ................................
10,020.00
FICASocial Sec. Taxes Payable ....................
298.84
To record payment of payroll.
(d)
Aug 31
Payroll Taxes Expense ............................................
530.53
FICASocial Sec. Taxes Payable ....................
298.84
FICAMedicare Taxes Payable ........................
145.29
(e)
Aug 31
FICASocial Security Taxes Payable....................
597.68
FICAMedicare Taxes Payable ..............................
290.58
Exercise 9-18 (25 minutes)
(in SEK millions)
PROBLEM SET A
Problem 9-1A (45 minutes)
Locust
Natl. Bank
Fargo
Maturity dates
Interest due at maturity
Principal of the note ......................
$35,000
$80,000
$42,000
Accrued interest on Fargo note at the end of 2014
Interest on Fargo note in 2015
Problem 9-1A (Concluded)
5.
2014
Apr. 20
Merchandise Inventory ...........................................
40,250
Accounts PayableLocust ..............................
40,250
Purchased merchandise on credit.
May 19
Accounts PayableLocust ....................................
40,250
Cash ....................................................................
5,250
Borrowed cash with a 120-day, 9% note.
Aug. 17
Interest Expense ......................................................
875
Notes PayableLocust ...........................................
35,000
Cash ....................................................................
35,875
Paid note with interest.
Notes PayableFargo Bank .............................
42,000
Borrowed cash with 60-day, 8% note.
2015
Problem 9-2A (25 minutes)
Part 1
Jan. 8
Office Salaries Expense ..........................................
22,760.00
Sales Salaries Expense ...........................................
65,840.00
FICASocial Sec. Taxes Payable* ..................
5,493.20
Part 2
Problem 9-3A (60 minutes)
1. Each employee’s FICA withholdings for Social Security
Dahlia
Trey
Kiesha
Chee
Total
Maximum base ..............
$117,000
$117,000
$117,000
$117,000
Earned through 8/18 .....
115,900
116,100
7,100
1,050
Yet under maximum ......
$ 1,100
$ 900
$109,900
$115,950
2. Each employee’s FICA withholdings for Medicare (no limits)
Dahlia
Trey
Kiesha
Chee
Total
Earned this week .........
$ 2,000
$ 900
$ 450
$ 400
3. Employer’s FICA taxes for Social Security
Dahlia
Trey
Kiesha
Chee
Total
4. Employer’s FICA taxes for Medicare
Dahlia
Trey
Kiesha
Chee
Total
Problem 9-3A (Concluded)
5. Employer’s FUTA taxes
Dahlia
Trey
Kiesha
Chee
Total
Maximum base .................
$ 7,000
$ 7,000
$ 7,000
$ 7,000
6. Employer’s SUTA taxes
Dahlia
Trey
Kiesha
Chee
Total
7. Each employee’s net (take-home) pay
Dahlia
Trey
Kiesha
Chee
Total
Gross earnings ..............
$2,000.00
$ 900.00
$450.00
$400.00
$3,750.00
8. Employer’s total payroll-related expense for each employee
Dahlia
Trey
Kiesha
Chee
Total
Gross earnings ...............
$2,000.00
$ 900.00
$450.00
$400.00
$3,750.00
Problem 9-4A (40 minutes)
1.
2014
Nov. 11
Cash ..........................................................................
7,875
Sales ...................................................................
7,875
Sold razors to customers.
11
Cost of Goods Sold .................................................
2,100
29
Estimated Warranty Liability ..................................
600
Merchandise Inventory .....................................
600
To record cost of razor warranty
replacements (30 x $20).
Problem 9-4A (Concluded)
2015
Jan. 5
Cash ..........................................................................
11,250
Sales ...................................................................
11,250
Sold razors to customers.
2. Warranty expense for November 2014 and December 2014
Sales
Percent
Warranty Expense
3. Warranty expense for January 2015
4. Balance of the estimated liability as of December 31, 2014
Warranty expense for November ....................................
$ 630
credit
5. Balance of the estimated liability as of January 31, 2015
Beginning balance ..........................................................
$1,050
credit
Problem 9-5A (60 minutes)
1. Miller Company
2. Weaver Company
3. Sales increase by 30% (multiply prior sales by 1.3)
Miller Co.
Weaver Co.
Sales .............................................
$1,300,000
$1,300,000
4. Sales increase by 50% (multiply prior sales by 1.5)
Miller Co.
Weaver Co.
5. Sales increase by 80% (multiply prior sales by 1.8)
Miller Co.
Weaver Co.
Problem 9-5A (Continued)
6. Sales decrease by 10% (multiply prior sales by 0.9)
Miller Co.
Weaver Co.
7. Sales decrease by 20% (multiply prior sales by 0.8)
Miller Co.
Weaver Co.
8. Sales decrease by 40% (multiply prior sales by 0.6)
Miller Co.
Weaver Co.
9. The higher fixed cost strategy (having more fixed interest expense) of
Weaver Co. accentuates the effects of increases and decreases in sales.
That is, increases in sales produce greater increases in net income and
Problem 9-6AA (50 minutes)
Mar. 15
FICASocial Security Taxes Payable ...................
3,472
FICAMedicare Taxes Payable .............................
812
Employee Fed. Income Taxes Payable. .................
4,000
Cash ................................................................
8,284
FICAMedicare Taxes Payable .......................
406
Employee Fed. Income Taxes Payable ............
4,000
Salaries Payable ................................................
21,858
To record payroll for the period.
31
Salaries Payable ......................................................
21,858
FICAMedicare Taxes Payable .......................
406
State Unemployment Taxes Payable ...............
560
Federal Unemployment Taxes Payable ...........
84
To record employer payroll taxes.
FICAMedicare Taxes = $406 (same as employees)
Problem 9-6AA (Concluded)
Apr. 15
FICASocial Security Taxes Payable ...................
3,472
FICAMedicare Taxes Payable .............................
812
Employee Fed. Income Taxes Payable ..................
4,000
PROBLEM SET B
Problem 9-1B (45 minutes)
Fox
Products
Spring
Bank
City
Bank
Maturity dates
Interest due at maturity
Principal of the note .........................
$4,600
$12,000
$8,000
Accrued interest on City Bank note at the end of 2014
4. Interest in 2015
Problem 9-1B (Concluded)
5.
2014
Apr. 22
Merchandise Inventory ...........................................
5,000
Accounts PayableFox Products ...................
5,000
Purchased merchandise on credit.
May 23
Accounts PayableFox Products .........................
5,000
July 15
Cash ..........................................................................
12,000
Notes PayableSpring Bank ...........................
12,000
Borrowed cash with a 120-day, 10% note.
22
Interest Expense ......................................................
115
Notes PayableSpring Bank .................................
12,000
Cash ....................................................................
12,400
Paid note with interest.
Borrowed cash with a 45-day, 9% note.
Accrued interest on note payable.
2015

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