Sylvestor Systems

Question-1

Sylvestor Systems borrows $199,000 cash on May 15, 2017, by signing a 180-day, 4% note.

1. On what date does this note mature?

November 10, 2017
November 11, 2017
November 12, 2017
November 13, 2017
November 14, 2017

2. Assume the face value of the note equals $199,000, the principal of the loan.

(a) Prepare the journal entry to record issuance of the note.

(b) First, complete the table below to calculate the interest expense at maturity. Use those calculated values to prepare your journal entry to record payment of the note at maturity. (Use 360 days a year. Round final answers to the nearest whole dollar.)

Question-2

BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $118,500 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 2.9% of the first $7,000 paid to its employee.

Gross Pay through AugustGross Pay for September
a.$6,400$1,700
b.20,1004,000
c.114,1009,900

Assuming situation a, prepare the employer’s September 30 journal entries to record salary expense and its related payroll liabilities for this employee. The employee’s federal income taxes withheld by the employer are $60 for this pay period. (Round your answers to 2 decimal places.)

Question-3

Listed below are a few transactions and events of Maxum Company.

  1. Employees earn vacation pay at a rate of one day per month. During December, 31 employees qualify for one vacation day each. Their average daily wage is $270 per employee.
  2. During December, Maxum Company sold 4,300 units of a product that carries a 60-day warranty. December sales for this product total $139,000. The company expects 8% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $14. Prepare any necessary adjusting entries at December 31, 2017, for Maxum Company’s year-end financial statements for each of the above separate transactions and events.

Question-4

Paloma Co. has four employees. FICA Social Security taxes are 6.2% of the first $118,500 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. Also, for the first $7,000 paid to each employee, the company’s FUTA taxes are 0.6% and SUTA taxes are 2.15%. The company is preparing its payroll calculations for the week ended August 25. Payroll records show the following information for the company’s four employees.

Current Week
NameGross Pay through Aug. 18Gross PayIncome Tax Withholding
Dali$118,200$2,800$398
Trey116,0502,450395
Kiesha7,90053046
Chee1,85048036

In addition to gross pay, the company must pay one-half of the $76 per employee weekly health insurance; each employee pays the remaining one-half. The company also contributes an extra 8% of each employee’s gross pay (at no cost to employees) to a pension fund.

Required:

Compute the following for the week ended August 25. (Round your intermediate calculations and final answers to 2 decimal places.):

Question-5

Listed below are a few transactions and events of Piper Company.

  1. Piper Company records a year-end entry for $10,000 of previously unrecorded cash sales (costing $5,000) and its sales taxes at a rate of 4%.
  2. The company earned $50,000 of $125,000 previously received in advance and originally recorded as unearned services revenue. Prepare any necessary adjusting entries at December 31, 2017, for Piper Company’s year-end financial statements for each of the above separate transactions and events. (Piper has the policy of recording cash received in advance in balance sheet accounts.)

Question-6

Tyrell Co. entered into the following transactions involving short-term liabilities in 2016 and 2017.

2016

Apr. 20 Purchased $35,000 of merchandise on credit from Locust, terms n/30. Tyrell uses the perpetual inventory system.

May 19 Replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 8% annual interest along with paying $0 in cash.

July 8 Borrowed $51,000 cash from NBR Bank by signing a 120-day, 12% interest-bearing note with a face value of $51,000.

__?__ Paid the amount due on the note to Locust at the maturity date.

__?__ Paid the amount due on the note to NBR Bank at the maturity date.

Nov. 28 Borrowed $21,000 cash from Fargo Bank by signing a 60-day, 8% interest-bearing note with a face value of $21,000.

Leave a Reply

Your email address will not be published.