1.According to a summary of the payroll of Scotland Company, $450,000 was subject to the 7.0% social security tax and $500,000 was subject to the 1.5% Medicare tax. Federal income tax withheld was $98,000. Also, $15,000 was subject to state (4.2%) and federal (0.8%) unemployment taxes. The journal entry to record accrued payroll taxes would include:
- a debit to SUTA Payable of $630
- a debit to SUTA Payable of $18,900
- a credit to SUTA Payable of $630
- a credit to SUTA Payable of $18,900
2.Benson and Orton are partners who share income in the ratio of 2:3 and have capital balances of $60,000 and $40,000 respectively. Ramsey is admitted to the partnership and is given a 10% interest by investing $20,000. What is Orton's capital balance after admitting Ramsey?
- $44,800
- $35,200
- $20,000
- $16,000
3.A $6,000, 60-day, 12% note recorded on November 21 is not paid by the maker at maturity. The journal entry to recognize this event is
- debit Cash, $6,120; credit Notes Receivable, $6,120
- debit Accounts Receivable, $6,120; credit Notes Receivable, $6,000; Credit Interest Receivable, $120
- debit Notes Receivable, $6,060; credit Accounts Receivable, $6,060
- debit Accounts Receivable, $6,120; credit Notes Receivable, $6,000; Credit Interest Revenue, $120
4. On October 30, Seba Salon, Inc. issued a 90-day note with a face amount of $60,000 to Reyes Products, Inc. for merchandise inventory. Assuming a 360-day year, determine the proceeds of the note assuming the note is discounted at 8%.
- $55,200
- $64,800
- $58,800
- $61,200
5. Singer and McMann are partners in a business. Singer's original capital was $40,000 and McMann's was $60,000. They agree to salaries of $12,000 and $18,000 for Singer and McMann respectively and 10% interest on original capital. If they agree to share remaining profits and losses on a 3:2 ratio, what will Singer's share of the income (loss) be if the net loss for the year was $10,000?
- ($12,600)
- ($14,000)
- ($6,000)
- ($10,000)