Question :
126. On April 12, Hong Company agrees to accept a 60-day, : 1258059
126. On April 12, Hong Company agrees to accept a 60-day, 10%, $4,500 note from Indigo Company to extend the due date on an overdue account. What is the journal entry needed to record the payment of the note by Indigo Company on the maturity date?
A. Debit Notes Payable $4,500; debit Interest Expense $75; credit Cash $4,575.
B. Debit Notes Payable $4,500; credit Interest Expense $75, credit Cash $4,425.
C. Debit Cash $4,575; credit Interest Revenue $75; credit Notes Payable $4,500.
D. Debit Notes Payable $4,500; debit Interest Expense $112; credit Cash $4,612.
E. Debit Cash $4,575; credit Interest Revenue $75; credit Notes Receivable $4,500.
127. On May 22, Jarrett Company borrows $7,500 from Fairmont Financing, signing a 90-day, 8%, $7,500 note. What is the journal entry needed to record the transaction by Jarrett Company?
A. Debit Cash $7,500; credit Accounts Payable $7,500.
B. Debit Accounts Payable $7,500; credit Notes Payable $7,500.
C. Debit Cash $7,650; credit Notes Payable $7,650.
D. Debit Cash $7,500; credit Notes Payable $7,500.
E. Debit Notes Receivable $7,500; credit Cash $7,500.
128. . On May 22, Jarrett Company borrows $7,500 from Fairmont Financing, signing a 90-day, 8%, $7,500 note. What is the journal entry needed to record the payment of the note by Jarrett Company on the maturity date?
A. Debit Notes Payable $7,500; credit Interest Expense $150; credit Cash $7,350.
B. Debit Notes Payable $7,500; credit Cash $7,500.
C. Debit Notes Payable $7,650; credit Cash $7,650.
D. Debit Notes Payable $7,500; debit Interest Expense $150; credit Cash $7,650.
E. Debit Cash $7,650; credit Interest Revenue $150; credit Notes Receivable $7,500.
129. An employee earns $5,500 per month working for an employer. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 4.4%. Both unemployment taxes are applied to the first $7,000 of an employee’s pay. The employee has $182 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $150 and contributes $75 to a retirement plan each month. What is the amount of net pay for the employee for the month of January?
A. $4,827.00
B. $4,672.25
C. $4,628.25
D. $4,386.25
E. $4,430.25
130. An employee earned $4,600 in February working for an employer. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The employee has $644 in federal income taxes withheld and has voluntary deductions for health insurance of $50 and contributes 10% of gross pay to a retirement plan each month. The employer pays the $200 remainder of the health insurance premium and an equal amount of contribution to the retirement fund. What is the amount of net pay for the employee for the month of February?
A. $3,094.10
B. $3,496.00
C. $3,604.10
D. $3,446.00
E. $2,634.10
131. An employee earns $5,500 per month working for an employer. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 4.4%. Both unemployment taxes are applied to the first $7,000 of an employee’s pay. The employee has $182 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $150 and contributes $75 to a retirement plan each month. What is the amount the employer should record as payroll taxes expense for the employee for the month of January?
A. $420.75
B. $464.75
C. $602.75
D. $841.50
E. $695.75
132. An employee earned $4,600 in February working for an employer. Cumulative earnings of the previous pay periods are $4,800. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 4.4%. Both unemployment taxes are applied to the first $7,000 of an employee’s pay. What is the amount the employer should record as payroll taxes expense for the month of February?
A. $581.90
B. $110.00
C. $351.90
D. $461.90
E. $230.00
133. All of the following statements regarding FICA taxes are true except:
A. FICA taxes are deducted from the employee.
B. Employers must pay withheld FICA taxes to the IRS.
C. The amount of FICA deducted from the employee is credited to a liability account.
D. A self-employed person is exempt from FICA taxes.
E. An employer must pay FICA taxes equal to the amount withheld from the employee.
134. Athena Company provides employee health insurance that costs $5,000 per month. In addition, the company contributes an amount equal to 5% of the employees’ $120,000 gross salary to a retirement program. The entry to record the accrued benefits for the month would include a:
A. Debit to Medical Insurance Payable $5,000.
B. Debit to Employee Retirement Program Payable $6,000.
C. Debit to Employee Benefits Expense $11,000.
D. Credit to Employee Benefits Expense $11,000.
E. Debit to Payroll Taxes Expense $11,000.
135. Athena Company’s salaried employees earn two weeks of vacation per year. It pays $858,000 in total employee salaries for 52 weeks but its employees work only 50. Record Athena Company’s weekly journal entry to record the vacation expense:
A. Debit Vacation Benefits Expense $16,500; credit Vacation Benefits Payable $16,500.
B. Debit Vacation Benefits Expense $17,160; credit Vacation Benefits Payable $17,160.
C. Debit Vacation Benefits Expense $17,875; credit Vacation Benefits Payable $17,875.
D. Debit Vacation Benefits Payable $17,160; credit Vacation Benefits Expense $17,160.
E. Debit Vacation Benefits Payable $16,500; credit Vacation Benefits Expense $16,500.
