80.2K

Verified Solution

Link Copied!

Please Provide correct answer ASAP for thumbs up!!

Borrowed $10,000 from the North Pole Bank for three years, at 6% interest. Dec. 1 Interest is due on the first day of every month, starting on January 1 next year- Hired seven elves to package toys (they Dec. 5 start work tomorrow) and nine reindeer to deliver them on Christmas Eve. Since they were hired, the seven elves Dec. 24 have worked for 15 days each, 7 hours per day, and today Santa pays them. $20 per hour. As the North Pole is in Canada, Santa has deducted the following in total Dec. 24 from the elves' pay: EIT \$2200: CPP $635; and El$450. The appropriate employer portion is also accrued The deliveries were successful and the reindeer are paid with apples, oats, Dec. 26 honey, and whatever milk and cookies Santa was able to take away. Santa's accountants, Scrooge, Grinch \& Dec. 28 Partners, tell Santa that he owes $7500 for last year's income taxes. He has not paid this amount yet. It will be paid in Aprii. Dec. 31 The first interest amount on the loan. due tomorrow, is accrued. Jan. 1 The bank deducts the interest from Santa's account. Santa pays Revenue Canada the Jan. 15 amount owed with respect to the elves' payroll. How much interest does Santa pay on January 1 ? (2 marks) How much, in total, was the elves' gross pay on December 24 ? (2 marks) How much will Santa pay the elves on December 24? (2 marks) How much does Santa pay to the Canada Revenue Agency on January 15, with respect to the elves' December payroll? (2 marks) How does Santa record the December 1 transaction? (1 mark) A. increase both Cash and Bank Loan Payable B. increase both Cash and Accounts Payable C. increase both Cash and Interest Payable D. increase both Cash and Owner's Equity E. increase both Cash and Retained Earnings F. No entry is needed until the loan is paid. Enter the letter that corresponds to your choice. (A B C D E F) A Which of the above items are events, not transactions, and require no entry? ( 1 mark) A. December 5, 24, and 26 B. December 5,26 , and 28 C. December 5,24,26, and 28 D. December 5 and 26 only E. December 24,26 , and 28 F. All of the items are transactions which require entries. Enter the letter that corresponds to your choice. (A B C D E F) How does Santa record the December 28 transaction? (1 mark) A. increase both Income Tax Payable and EIT Expense B. increase both EIT Payable and Income Tax Expense C. increase both Income Tax Payable and Income Tax Expense D. increase both EIT Payable and EIT Expense E. increase Income Tax Expense and decrease Cash F. increase EIT Expense and decrease Cash Enter the letter that corresponds to your choice. (A B C D E F) How does Santa record the interest accrual on December 31 ? (1 mark) A. increase both Bank Loan Payable and Bank Fees Expense B. increase both Bank Loan Payable and Interest Expense C. increase both Accounts. Payable and Bank Fees Expense D. increase both Accounts Payable and Interest Expense E. increase both Interest Payable and Bank Fees Expense F. increase both interest Payable and Interest Expense Enter the letter that corresponds to your choice. (A B C D E F) How does Santa record the interest payment on January 1 ? (1 mark) A. decrease both Accounts Payable and Cash B. decrease both Interest Payable and Cash C. decrease both Bank Loan Payable and Cash D. decrease Interest Payable, Bank Loan Payable, and Cash E. decrease Accounts Payable, Bank Loan Payable, and Cash F. decrease Interest Payable, Accounts Payable, and Cash Enter the letter that corresponds to your choice. (A B C D E F) Which accounts will be affected, and how, by the January 15 payment? (4 marks) A. Cash, CPP Payable, El Payable, and EIT Payable all decrease, and Wages Expense increases B. Cash, CPP Payable. EI Payable, and EIT Payable all decrease, and Wages Expense increases C. Cash, CPP Payable, El Payable, and Income Tax Payable all decrease D. Cash, CPP Payable. El Payable, and Income Tax Payable all decrease, and Employee Benefits Expense increases E. Cash, CPP Payable, El Payable, and EIT Payable all decrease F. Cash, CPP Payable, El Payable, and EIT Payable all decrease, and Employee Benefits Expense increases G. Cash, CPP Payable, El Payable, and EIT Payable all decrease, and Wages Expense and Employee Benefits Expense both increase H. Cash and Employee Benefits Payable both decrease Enter the letter that corresponds to your choice. (A B C D E F G H)

Answer & Explanation Solved by verified expert

See Answer