CHAPTER 10 Liabilities: Current, Installment Notes, and Contingencies
10–21
Prob. 10–4A
1. PAYROLL FOR WEEK ENDING December 9
Employee
Total
Hours
EARNINGS
DEDUCTIONS
PAID
ACCOUNT DEBITED
Regular
Overtime
Social
Security
Tax
Medicare
Tax
Federal
Income
Tax
U.S.
Savings
Bonds
Total
Net
Pay
Ck.
No.
Sales
Salaries
Expense
Office
Salaries
Expense
Aaron
46
2,720.00
612.00
199.92
49.98
750.20
100.00
1,100.10
2,231.90
901
3,332.00
Cobb
41
2,480.00
93.00
154.38
38.60
537.68
110.00
840.66
1,732.34
902
2,573.00
Clemente
48
2,800.00
840.00
218.40
54.60
832.64
120.00
1,225.64
2,414.36
903
3,640.00
DiMaggio
35
1,960.00
117.60
29.40
366.04
513.04
1,446.96
904
1,960.00
Griffey, Jr.
45
2,480.00
465.00
176.70
44.18
641.84
130.00
992.72
1,952.28
905
2,945.00
Mantle
1,800.00
108.00
27.00
342.45
120.00
597.45
1,202.55
906
1,800.00
Robinson
36
1,944.00
116.64
29.16
382.56
130.00
658.36
1,285.64
907
1,944.00
Williams
2,000.00
120.00
30.00
398.24
125.00
673.24
1,326.76
908
2,000.00
Vaughn
42
2,480.00
186.00
159.96
39.99
584.72
50.00
834.67
1,831.33
909
2,666.00
20,664.00
2,196.00
1,371.60
342.91
4,836.37
885.00
7,435.88
15,424.12
19,060.00
3,800.00
2.
Sales Salaries Expense
19,060.00
Office Salaries Expense
3,800.00
Social Security Tax Payable
1,371.60
Medicare Tax Payable
342.91
Employees Federal Income Tax Payable
4,836.37
Bond Deductions Payable
885.00
Salaries Payable
15,424.12
CHAPTER 10 Liabilities: Current, Installment Notes, and Contingencies
10–22
Prob.10–5 A
1.
Dec.
2
Bond Deductions Payable
3,400
Cash
3,400
2
Social Security Tax Payable
9,273
Medicare Tax Payable
2,318
Employees Federal Income Tax Payable
15,455
Cash
27,046
13
Operations Salaries Expense
43,200
Officers Salaries Expense
27,200
Office Salaries Expense
6,800
Social Security Tax Payable
4,632
Medicare Tax Payable
1,158
Employees Federal Income Tax Payable
15,440
Employees State Income Tax Payable
3,474
Bond Deductions Payable
1,700
Medical Insurance Payable
4,500
Salaries Payable
46,296
13
Salaries Payable
46,296
Cash
46,296
13
Payroll Tax Expense
6,265
Social Security Tax Payable
4,632
Medicare Tax Payable
1,158
State Unemployment Tax Payable
350
Federal Unemployment Tax Payable
125
16
Social Security Tax Payable
9,264
Medicare Tax Payable
2,316
Employees Federal Income Tax Payable
15,440
Cash
27,020
19
Medical Insurance Payable
31,500
Cash
31,500
CHAPTER 10 Liabilities: Current, Installment Notes, and Contingencies
10–23
Prob.10–5 A (Concluded)
Dec.
27
Operations Salaries Expense
42,800
Officers Salaries Expense
28,000
Office Salaries Expense
7,000
Social Security Tax Payable
4,668
Medicare Tax Payable
1,167
Employees Federal Income Tax Payable
15,404
Employees State Income Tax Payable
3,501
Bond Deductions Payable
1,700
Salaries Payable
51,360
27
Salaries Payable
51,360
Cash
51,360
27
Payroll Tax Expense
6,135
Social Security Tax Payable
4,668
Medicare Tax Payable
1,167
State Unemployment Tax Payable
225
Federal Unemployment Tax Payable
75
27
Employees State Income Tax Payable
20,884
Cash
20,884
31
Bond Deductions Payable
3,400
Cash
3,400
31
Pension Expense
60,000
Cash
45,000
Unfunded Pension Liability
15,000
To record pension cost and unfunded
liability.
2.
a.
Dec.
31
Operations Salaries Expense
8,560
Officers Salaries Expense
5,600
Office Salaries Expense
1,400
Salaries Payable
15,560
Accrued wages for the period.
b.
31
Vacation Pay Expense
15,000
Vacation Pay Payable
15,000
Vacation pay accrued for the period.
CHAPTER 10 Liabilities: Current, Installment Notes, and Contingencies
10–24
Prob.10–1 B
1.
Apr.
15
Cash
225,000
Notes Payable
225,000
May
1
Equipment
310,400
Interest Expense ($320,000 180 ÷ 360 6%)
9,600
Notes Payable
320,000
15
Notes Payable
225,000
Interest Expense ($225,000 30 ÷ 360 6%)
1,125
Notes Payable
225,000
Cash
1,125
July
14
Notes Payable
225,000
Interest Expense ($225,000 60 ÷ 360 8%)
3,000
Cash
228,000
Aug.
16
Inventory
90,000
Accounts Payable—Exige Co.
90,000
Sept.
15
Accounts Payable—Exige Co.
90,000
Notes Payable
90,000
Oct.
28
Notes Payable
320,000
Cash
320,000
30
Notes Payable
90,000
Interest Expense ($90,000 45 ÷ 360 6%)
675
Cash
90,675
Nov.
16
Store Equipment
450,000
Notes Payable
400,000
Cash
50,000
Dec.
16
Notes Payable
20,000
Interest Expense ($20,000 30 ÷ 360 9%)
150
Cash
20,150
28
Litigation Loss
87,500
Litigation Claims Payable
87,500
CHAPTER 10 Liabilities: Current, Installment Notes, and Contingencies
Prob.10–1B (Concluded)
2.
a.
Product Warranty Expense
26,800
Product Warranty Payable
26,800
Warranty expense for the current year.
Interest Expense
Interest Payable
Interest on notes ($20,000 9% 45 ÷ 360 19).
CHAPTER 10 Liabilities: Current, Installment Notes, and Contingencies
10–26
Prob. 10–2B
1.
a.
Dec.
30
Sales Salaries Expense
625,000
Warehouse Salaries Expense
240,000
Office Salaries Expense
320,000
Employees Income Tax Payable
232,260
Social Security Tax Payable ($1,185,000 6%)
71,100
Medicare Tax Payable ($1,185,000 1.5%)
17,775
U.S. Savings Bond Deductions Payable
35,500
Group Insurance Payable
53,325
Salaries Payable
775,040
b.
Dec.
30
Payroll Tax Expense
90,735
Social Security Tax Payable
71,100
Medicare Tax Payable
17,775
State Unemployment Tax Payable
1,620
Federal Unemployment Tax Payable
240
State Unemployment Tax Payable = $30,000 5.4%
Federal Unemployment Tax Payable = $30,000 0.8%
2.
a.
Dec.
30
Sales Salaries Expense
625,000
Warehouse Salaries Expense
240,000
Office Salaries Expense
320,000
Employees Income Tax Payable
232,260
Social Security Tax Payable
71,100
Medicare Tax Payable
17,775
U.S. Savings Bond Deductions Payable
35,500
Group Insurance Payable
53,325
Salaries Payable
775,040
b.
Jan.
4
Payroll Tax Expense
162,345
Social Security Tax Payable
71,100
Medicare Tax Payable
17,775
State Unemployment Tax Payable
63,990
Federal Unemployment Tax Payable
9,480
State Unemployment Tax Payable = $1,185,000 5.4%
Federal Unemployment Tax Payable = $1,185,000 0.8%
CHAPTER 10 Liabilities: Current, Installment Notes, and Contingencies
10–27
Prob. 10–3B
1.
Employee
Gross
Earnings*
Federal Income
Tax Withheld
Social Security
Tax Withheld
Medicare
Tax Withheld
Addai ……………..
$44,880.00
$ 9,372.00
$ 2,692.80
$ 673.20
Kasay …………….
25,200.00
3,731.00
1,512.00
378.00
McGahee ………..
67,410.00
12,999.00
4,044.60
1,011.15
Moss ………………
55,200.00
9,396.00
3,312.00
828.00
Stewart …………..
4,500.00
758.00
270.00
67.50
Tolbert ……………
4,875.00
669.00
292.50
73.13
Wells ……………..
84,000.00
18,872.00
5,040.00
1,260.00
$ 17,163.90
$ 4,290.98
2. a. Social security tax paid by employer ………………………………………………. $17,163.90
b. Medicare tax paid by employer ……………………………………………………….. 4,290.98
c. Earnings subject to unemployment compensation tax,
CHAPTER 10 Liabilities: Current, Installment Notes, and Contingencies
10–28
Prob. 10–4B
1. PAYROLL FOR WEEK ENDING December 9,
Employee
Total
Hours
EARNINGS
DEDUCTIONS
PAID
ACCOUNT DEBITED
Regular
Overtime
Total
Social
Security
Tax
Medicare
Tax
Federal
Income
Tax
U.S.
Savings
Bonds
Total
Net
Pay
Ck.
No.
Sales
Salaries
Expense
Office
Salaries
Expense
Carlton
52
2,000.00
900.00
2,900.00
174.00
43.50
667.00
60.00
944.50
1,955.50
328
2,900.00
Grove
4,000.00
4,000.00
240.00
60.00
860.00
100.00
1,260.00
2,740.00
329
4,000.00
Johnson
36
1,872.00
1,872.00
112.32
28.08
355.68
496.08
1,375.92
330
1,872.00
Koufax
45
2,320.00
435.00
2,755.00
165.30
41.33
578.55
44.00
829.18
1,925.82
331
2,755.00
Maddux
37
1,665.00
1,665.00
99.90
24.98
349.65
62.00
536.53
1,128.47
332
1,665.00
Seaver
3,200.00
3,200.00
192.00
48.00
768.00
120.00
1,128.00
2,072.00
333
3,200.00
Spahn
46
2,080.00
468.00
2,548.00
152.88
38.22
382.20
573.30
1,974.70
334
2,548.00
Winn
48
2,000.00
600.00
2,600.00
156.00
39.00
572.00
75.00
842.00
1,758.00
335
2,600.00
Young
43
2,160.00
243.00
2,403.00
144.18
36.05
480.60
80.00
740.83
1,662.17
336
2,403.00
21,297.00
2,646.00
23,943.00
1,436.58
359.16
5,013.68
541.00
7,350.42
16,592.58
16,743.00
7,200.00
2.
Sales Salaries Expense
16,743.00
Office Salaries Expense
7,200.00
Social Security Tax Payable
1,436.58
Medicare Tax Payable
359.16
Employees Federal Income Tax Payable
5,013.68
Bond Deductions Payable
541.00
Salaries Payable
16,592.58
CHAPTER 10 Liabilities: Current, Installment Notes, and Contingencies
10–29
Prob. 10–5B
1.
Dec.
1
Medical Insurance Payable
2,520
Cash
2,520
1
Social Security Tax Payable
2,913
Medicare Tax Payable
728
Employees Federal Income Tax Payable
4,490
Cash
8,131
2
Bond Deductions Payable
2,300
Cash
2,300
12
Sales Salaries Expense
14,500
Officers Salaries Expense
7,100
Office Salaries Expense
2,600
Social Security Tax Payable
1,452
Medicare Tax Payable
363
Employees Federal Income Tax Payable
4,308
Employees State Income Tax Payable
1,089
Bond Deductions Payable
1,150
Medical Insurance Payable
420
Salaries Payable
15,418
12
Salaries Payable
15,418
Cash
15,418
12
Payroll Tax Expense
2,220
Social Security Tax Payable
1,452
Medicare Tax Payable
363
State Unemployment Tax Payable
315
Federal Unemployment Tax Payable
90
15
Social Security Tax Payable
2,904
Medicare Tax Payable
726
Employees Federal Income Tax Payable
4,308
Cash
7,938
CHAPTER 10 Liabilities: Current, Installment Notes, and Contingencies
Prob. 10–5B (Concluded)
Dec.
26
Sales Salaries Expense
14,250
Officers Salaries Expense
7,250
Office Salaries Expense
2,750
Social Security Tax Payable
1,455
Medicare Tax Payable
364
Employees Federal Income Tax Payable
4,317
Employees State Income Tax Payable
1,091
Bond Deductions Payable
1,150
Salaries Payable
15,873
26
Salaries Payable
15,873
Cash
15,873
26
Payroll Tax Expense
2,009
Social Security Tax Payable
1,455
Medicare Tax Payable
364
State Unemployment Tax Payable
150
Federal Unemployment Tax Payable
40
30
Employees State Income Tax Payable
6,258
Cash
6,258
30
Bond Deductions Payable
2,300
Cash
2,300
31
Pension Expense
65,500
Cash
55,400
Unfunded Pension Liability
10,100
To record pension cost and unfunded
liability.
2.
a.
Dec.
31
Sales Salaries Expense
4,275
Officers Salaries Expense
2,175
Office Salaries Expense
825
Salaries Payable
7,275
Accrued wages for the period.
b.
31
Vacation Pay Expense
13,350
Vacation Pay Payable
13,350
Vacation pay accrued for the period.
10–31
COMPREHENSIVE PROBLEM 3
1.
20Y5
Jan.
3
Petty Cash
4,500
Cash
4,500
Feb.
26
Office Supplies
1,680
Miscellaneous Selling Expense
570
Miscellaneous Administrative Expense
880
Cash
3,130
Apr.
14
Inventory
31,300
Accounts Payable
31,300
May
13
Accounts Payable
31,300
Cash
31,300
17
Cash
21,200
Cash Short and Over
40
Sales
21,240
June
2
Notes Receivable
180,000
Accounts Receivable—Ryanair
180,000
Aug.
1
Cash
182,400
Notes Receivable
180,000
Interest Revenue
2,400
($180,000 8% 60 ÷ 360 = $2,400).
24
Cash
7,600
Allowance for Doubtful Accounts
1,400
Accounts Receivable—Finley
9,000
Sept.
15
Accounts Receivable—Finley
1,400
Allowance for Doubtful Accounts
1,400
15
Cash
1,400
Accounts Receivable—Finley
1,400
CHAPTER 10 Liabilities: Current, Installment Notes, and Contingencies
Comp. Prob. 3 (Continued)
20Y5
Sept.
15
Land
654,925
Interest Expense ($670,000 90 ÷ 360 9%)
15,075
Notes Payable
670,000
Oct.
17
Cash
135,000
Notes Receivable
100,000
Accumulated Depreciation—Office Equipment
64,000
Loss on Sale of Office Equipment
21,000
Office Equipment
320,000
Nov.
30
Sales Salaries Expense
135,000
Office Salaries Expense
77,250
Employees Income Tax Payable
39,266
Social Security Tax Payable
12,735
Medicare Tax Payable
3,184
Salaries Payable
157,065
30
Payroll Tax Expense
16,229
Social Security Tax Payable
12,735
Medicare Tax Payable
3,184
State Unemployment Tax Payable
270
Federal Unemployment Tax Payable
40
Dec.
14
Notes Payable
670,000
Cash
670,000
31
Pension Expense
190,400
Cash
139,700
Unfunded Pension Liability
50,700
Pension cost of $190,400 funded
at $139,700.
State Unemployment Tax Payable = $5,000 5.4%
Federal Unemployment Tax Payable = $5,000 0.8%