Homework 7
Question 1 Alpha Company records all sales at the register
with amounts that include 8% sales tax.
During November 2016, total sales at the register were recorded as
$706,320. Use this information to determine what amount of sales tax liability
that Alpha Company should record for an end of the month adjusting entry.
Question 2 Charlie Delta, an employee of the Bravo Zulu
Company is paid by cheque on each payday and earns $15 per hour. Charlie worked
50 hours the week ending February 26, 2016.
Overtime in excess of 40 hours must be paid at 150% of the normal hourly
rate. Payroll liabilities are paid at the end of each quarter. The following
apples to all of Charlie’s wages for this period:
Item
Rate/Amount
Social Security taxes
6.0%
Medicare/Medicaid taxes
1.5%
Federal Income Taxes withheld
$210
State Income Taxes withheld
$50
All this week’s
wages were subject to:
Item
Rate/Amount
Federal Unemployment Tax
0.5%
State Unemployment Tax
3.0%
Use this information to determine for the February 26 pay
period:
1. Charlie’s Net Pay
2. Bravo Zulu’s employer payroll tax expense
3. Total Payroll Liability for Bravo Zulu
(Round calculations to the nearest penny. Enter dollar
values in answer boxes rounded to the nearest penny.)
Question 3 On December 31, 2015, Alpha Corporation has
outstanding 1,000 shares of $100 par value, 7% cumulative and nonparticipating
preferred stock, and 20,000 shares of $10 par value common stock. No dividends
were paid in 2015. During 2016, Alpha distributed $40,000 in dividends. Use
this information to determine for the 2016 the amount of dividends that will be
distributed to:
Preferred Stock
Common Stock
Question 4 On January 2, 2016, Alpha Corporation’s initial
capital stock transaction consisted of an issuance of 5,000 shares of $5 par
value common stock, for $60 per share. On June 30, 2017 another 10,000 shares
were authorized to be issued. Use this information to determine dollar values
for the June 30, 2017 balances for:
Common Stock
Additional Paid in Capital in excess of par Common Stock
Question 5 On July 1, 2016, Alpha Company, a world famous
international monthly food publication, sold 1,000 two-year subscriptions to
their highly demanded monthly magazine. Each subscription sold for $18
each. Monthly magazines are mailed at
the end of each month. Use this information to determine what amount should be
reported on Alpha Company’s December 31, 2016 balance sheet as a part of the
Unearned Subscriptions Revenue related to the July 2016 sales.
Question 6 Alpha Company sells widgets for $35 each. The
widget has a one year warranty. Alpha estimates that 6% of the widgets will
require repair during the warranty period. The estimated average repair cost is
$4.30 per widget. On July 31, the Estimated
Warranty Liability account had a normal balance of $25,000. During August,
sales were $70,000. During August, 470 widgets were repaired under the warranty
agreement with an actual cost of $4.50 each.
Use this information to determine:
The August 31 Estimated Warranty Liability ending balance
The August Warranty Expense
Question 7 On July 1, 2016, Alpha Company, a world famous
international monthly food publication, sold 1,000 two-year subscriptions to
their highly demanded monthly magazine. Each subscription sold for $18
each. Monthly magazines are mailed at
the end of each month. Use this information to prepare the July 1 subscription
sale and the year end adjusting General Journal entries (without explanation)
for 2016. If no entry is required then write “No Entry Required.”
Question 8 On July 1, 2016, Alpha Company borrowed $100,000
from Mega Bank. Alpha signed a 5% note, due in one year. Alpha uses accrual
basis for accounting and its fiscal year ends on December 31. Use this
information to prepare the compound General Journal entry (without explanation)
for the payment of the note on June 30, 2017. If no entry is required then
write “No Entry Required.”
Question 9 On July 1, 2016, Alpha Company purchased from
Zulu Company, a truck for $24,000. Alpha signed a Note Payable due in one year
for $25,440. Alpha uses accrual basis for accounting and its fiscal year ends
on December 31. Use this information to prepare the compound General Journal
entry (without explanation) for the payment of the note on June 30, 2017. If no
entry is required then write “No Entry Required.”
Question 10 On January 2, 2016, Alpha Corporation issued
15,000 shares of $10 par value common stock for $15 per share. On March 1,
2016, Alpha reacquired 1,000 of these shares when they were trading $20 each.
September 1, 2016, when the market was soaring, Alpha reissued 500 shares of
treasury stock at the going market rate of $25 per share. Use this information
to prepare the General Journal entry (without explanation) for September 1.
Question 11 On January 1, 2016, Alpha Corporation had
300,000 shares of common stock outstanding with a par value of $3 per share. On
March 31, Alpha Corporation authorized a 10% stock dividend when the market
value was $8 per share. Use this information to prepare the General Journal
entry (without explanation) for March 31. If no entry is required then write
“No Entry Required.”
Question 12 The following are selected accounts for the
Alpha Dog Company after all Fiscal Year December 31, 2016, adjusting entries
& closing entries have been posted. All balances are normal.
Account
Amount
Common Stock, $5 par
$150,000
Treasury Stock, at cost $10 per share
20,000
Dividends Payable
5,000
Paid in Capital in
excess of par, Common Stock
30,000
Paid in Capital in
excess of par, Preferred Stock
3,500
Retained Earnings
140,000
Bonds Payable
75,000
Preferred Stock,
$100 par, 5% cumulative
35,000
On December 31, 2016, Common Stock was authorized 50,000
shares and Preferred Stock was authorized 5,000 shares. Prepare only the
Stockholder’s Equity section of the Classified Balance Sheet for the year end.
Be sure to use a good format, dollar signs and single underlines were required.
There are a few extra lines in the formatted input answer form to allow for
acceptable balance sheet format variations.
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