| 1. |
|
| |
| a. |
Journal
entry: |
| |
|
|
|
|
| Long-Term
Note Payable |
85,0000 |
|
|
| Current
Portion of Long-Term Debt |
|
85,000 |
|
|
| |
Balance
sheet: |
| |
|
|
|
|
| Current
liabilities |
|
|
$85,000 |
| Current
portion of long-term debt |
|
|
|
| Long-term
liabilities |
|
|
|
| Long-term
note payable less $85,000 current portion of long-term
debt |
315,000 |
|
| b. |
|
| |
1.
Assets received but not yet paid for: purchase supplies
on account. |
| |
2.
Accrued expense: interest payable |
| |
3.
Advance payment from customer: unearned revenue |
| |
4.
Loans payable within a year: two examples—a six-month
loan, or the current portion of
long-term debt |
|
| 2. |
$100.
Anne-Marie has 4 exemptions and the $1,600 is in the bracket
of at least $1,600 but less
than $1,620. |
| 3. |
An
employee is an individual who performs services for a business
when the business controls
(1) what will be done and (2) how it will be done. An independent
contractor is an individual
who is in business to offer services to the public and who is
in full control of the way in which
the services are performed. |
| 4. |
Form
W-2 is an annual document from an employer that reports an employee’s
gross pay,
taxable gross pay, and withholding items for a calendar year.
(Other items may also be reported
on the W-2 such as employer reimbursements and retirement plan
contributions.) Form W-4 is
used by the employer to determine employee filing status (married,
single, etc.) and the number
of withholding allowances claimed by the employee. A W-4 is submitted
by an individual at the
time that individual is hired as an employee. |
| 5. |
An employee earnings record is a legally
required record of an employee’s gross pay, withholding,
and net pay that must be maintained by an employer for each
employee. The earnings record is
necessary because it shows for each employee the gross wages,
withholding, and net pay for each
pay period, as well as the year-to-date cumulative amount. The
primary use of the employee
earnings record is as the source of the information that is
entered on form W-2. The cumulative
information is also useful for indicating when wage base limits
are reached.
|
| 6. |
FICA
is an acronym that stands for Federal Insurance Contribution
Act. This is the law that
created the Social Security system. FICA imposes a tax that consists
of two parts. The first part
is OASDI (Old Age and Survivor’s Disability Insurance). The
second part is Medicare, added in
1965, which provides a minimum level of medical insurance coverage.
OASDI tax is calculated
as a percentage of gross wages up to maximum gross wage amount,
referred to as the wage base.
The Medicare tax is a percentage of all gross wages. In this text,
we use 7.65% on a wage base of
$94,000 for OASDI and 1.45% on all wages for Medicare. FICA is
paid by employees, and then
an equal amount is matched by the employer. |
| |
|
