Youve just started your first accounting job, as the accounts payable and payroll clerk for Copperfield and Company, a provider of delicate wine glasses to restaurants. Your predecessor left the job suddenly, and was not able to complete all the tasks before leaving. You need to get up to speed and complete the unfinished tasks as soon as possible.Your tasks on your first day are the following:
1. Review the Payroll Journal entries made by your predecessor.
2. Compute the relevant amounts for the companys short-term note payable and determine whether your predecessors journal entries are correct.
3. Confirm the journal entry for this years payment on an installment note.
4. Make a recommendation as to whether the company should journalize any warranty expense for the month.
You decide to get started - the sooner the better!The following payroll Journal entries for Oct.15 were made by your predecessor. For FICA tax, assume that the social security rate is 6.0% and the Medicare rate is 1.5%. The state and federal unemployment tax rates are 5.4% and 0.8%, respectively. The company offers 401k plans to employees. Review the journal entries, then answer the questions that follow.
Copperfield and Company issued a 90-day, 5.00% note for $190,000 to a creditor on account. The previous clerk entered the following journal entries to record the note on July 10, and the payment of the note at maturity.
The followinf Journal entry was made by your predecessor to record the annual payment of a 5%, 10-year installment note.
POST. REK DEBIT CREDIT ASSETS LIABILITIES 1 85,500.00 307,800,00 1 57000.00 119,700.00 5 DATE DESCRIPTION Oct 15 Sales Sataries Expense Oficers Sataries Expense Office Salaries Expense Factory Wages Expense Social Security Tax Payable Medicare Tax Payable Employees Federal Income Tax Payable Medical Insurance Payable Retirement Contributions Payable Salaries Payable 34,200.00 8,550.00 1 102,600.00 1 62,700.00 3 85,500.00 10 276,450.00 11 44,176.00 12 34,200.00 13 8,550,00 15 Payroll Tax Expense Social Security Tax Payable Medicare Tax Payable Federal Unemployment Tax Payable State Unemployment Tax Payable 15 Pension Expense 1 184.00 15 1,242,00 16 39,900.00 17 Cash 39.900.00 1. Determine the payroll amount subject to federal and state unemployment taxes in this payroll. 2. What is the total payroll for Copperfield and Company shown in these journal entries? 3. What is Copperfield and Company's share of FICA taxes in this payroll? IS 4. How much has Copperfield and Company contributed to employee 401k plans in this payroll? PAGES JOURNAL ACCOUNTING EQUATION DATE DESCRIDO POLT CREDIT ASSET LALITIES TOURITY Iul 10 DET 190,000.00 Accounts Payable Nous Payable Notes Payable 190,000.00 1 199,500.00 1 Accounts Payabile 190,000.00 interest Expense 9,500.00 Journalize the payment of the note at maturity as it thould have been journalised Dontloppet to include the date. Anume a 30-any year JOURNAL ACCOUNTING EQUATION DETE DESTION POSTE DESIT CREDIT ASSETS LABUTICS TY Notes Payable JOURNAL ACCOUNTING EC DESCRIPTION POST REF DEAT CREDIT ASSETS LIABILITIES DATE Oct 1 interest Expense Notes Payable 710 22704000 475,52200 215 Cash 110 702,562.00 Using the information provided, compute the following amounts. Yol 1. What was the carrying amount (book value) of the installment note before the payment on October 12 10 Jos 11 2. What portion of next year's payment will be interest? (Round the amount to the nearest dollar)
