E13-1 (Balance Sheet Classification of Various Liabilities How would each of the following items be reported on the balance sheet? a. Accrued Vacation Pay b. Estimated Taxes Payable c. Service Warranties on Appliance Sales d. Bank Overdraft e. Employee payroll deductions unremitted f. Unpaid bonuses to officers g. Deposit received from customer to guarantee contract performance h. Sales tax payable i. Gift certificates sold to customers but as yet unredeemed
E13-1 Continued: How to report these items on a Balance Sheet? j. Premium offers outstanding k. Discount on N/P l. Personal Injury claim pending m. Current maturities of long-term debts to be paid from current assets n. Cash dividends declared but unpaid o. Dividends in arrears on preferred stock p. Loans from officers
E13-2 A/P & N/P The following are selected 1998 transactions of Sean Astin Corp: Sept 1Purchased inventory from Encino Company on account for $50,000. Astin records purchases gross and uses a periodic inventory system. Oct 1Issued a $50,000, 12-month, 12% note to Encino in payment of account. Oct 1Borrowed $50,000 from the Shore Bank by signing a 12-month, noninterest bearing $56,000 note. Required:1. JEs for transactions 2. ADJ JEs for December 31 3. Net Liability reported on 12/31 Balance Sheet for the interest-bearing and non-interest bearing note
E13-7 (Adjusting Entry for Sales Tax) During the month of June, R. Attenborough Boutique had cash sales of $233,200 and credit sales of $153,700, both of which include the 6% sales tax that must be remitted to the state by July 15. Required: Prepare the Adjusting JE that should be recorded to fairly present the June 30 financial statements Sales +.06Sales = Cash Collected How Much Tax was collected?
E13-8 (Payroll Tax Entries) The payroll of Rene Auber Company for September 1997 is as follows: Total payroll was $480,000, of which $110,000 is exempt from social security tax because it represented amounts paid in excess of $65,400 to certain employees. The amount paid to employees in excess of $7,000 was $400,000. Income taxes in the amount of $90,000 were withheld, as was $9,000 in union dues. The state unemployment tax is 3.5%, but Auber Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current F.I.C.A. tax is 7.65% on an employees wages to $65,400 and 1.45% in excess of $65,400. No employee for Auber makes more than $125,000. The federal unemployment tax rate is.8% after state credit. Required: Prepare the necessary JEs if the wages and salaries paid and the employer payroll taxes are recorded separately.
E13-10 (Warranties) Dookie Company sold 200 copymaking machines in 1998 for $4,000 each. Each unit included a one-year warranty. Maintenance on each machine during the warranty period averages $330. Required: (a) Prepare entries to record the sale of the machines and the related warranty costs, assuming that the accrual method is used. Actual warranty costs incurred in 1998 were $17,000 (b) On the basis of the data above, prepare the appropriate entries, assuming that the cash basis method is used.
P14-6 For the Entire $700,000 Bond Issue, Calculate the CV as of: 5/1/98 700,000 +.06(700,000) = $742,000 12/31/98742,000 - (42,000/116mths) x 8 mths = 739,103 4/1/99 739,103 - (42,000/116mths) x 3 mths = 738,017 CV Associated with $420,000 as of 4/1/99? 420/700 = 60% 60% x 738, 017 = 442,810 Calc Gain/Loss on the Retirement: Cost to retire: $420,000 x 1.02 = 428,400 CV of $420,000 as of 4/1(442,810) Extraord Gain 14,410