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Connect Financial Accounting Chapter 9 Homework Assignment

Q1. Dextra Computing sells merchandise for $16,000 cash on September 30 (cost of merchandise is $11,200). Dextra collects 9% sales tax. Record the entry for the $16,000 sale and its sales tax. Also record the entry that shows Dextra sending the sales tax on this sale to the government on October 15.

Q2. On January 15, the end of the first pay period of the year, North Company’s employees earned $22,000 of sales salaries. Withholdings from the employees’ salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $2,500 of federal income taxes, $455 of medical insurance deductions, and $120 of union dues. No employee earned more than $7,000 in this first period. Prepare the journal entry to record North Company’s January 15 salaries expense and related liabilities.

Q3. On September 1, Home Store sells a mower (that costs $310) for $610 cash with a one-year warranty that covers parts. Warranty expense is estimated at 9% of sales. On January 24 of the following year, the mower is brought in for repairs covered under the warranty requiring $43 in materials taken from the Repair Parts Inventory. Prepare the September 1 entry to record the mower sale (and cost of sale) and the January 24 entry to record the warranty repairs. (Round your answers to 2 decimal places.)

Q4. Sylvestor Systems borrows $113,000 cash on May 15 by signing a 180-day, 8%, $113,000 note.

On what date does this note mature?

Prepare the entry to record issuance of the note.

First, complete the table below to calculate the interest expense at maturity. Use those calculated values to prepare your entry to record payment of the note at maturity.

Q5. For each separate situation, indicate whether Cruz Company should (a) record a liability, (b) disclose in notes, or (c) have no disclosure.

Q6. Use the following information from separate companies a through d:

	Net Income (Loss)			Interest Expense			Income Taxes
a.	$	156,000		$	88,920		$	39,000
b.		150,600			52,710			54,216
c.		132,600			30,498			55,692
d.		159,100			7,955			76,368

Compute times interest earned. Which company indicates the strongest ability to pay interest expense as it comes due?

Q7. On January 8, the end of the first weekly pay period of the year, Regis Company’s employees earned $20,760 of office salaries and $70,840 of sales salaries. Withholdings from the employees’ salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $13,460 of federal income taxes, $1,410 of medical insurance deductions, and $860 of union dues. No employee earned more than $7,000 in this first period.

Calculate below the amounts for each of these four taxes of Regis Company. Regis’s state unemployment tax rate is 5.4% of the first $7,000 paid to each employee. The federal unemployment tax rate is 0.6%.

Prepare the journal entry to record Regis Company’s January 8 employee payroll expenses and liabilities.

Prepare the journal entry to record Regis’s employer payroll taxes resulting from the January 8 payroll. Regis’s state unemployment tax rate is 5.4% of the first $7,000 paid to each employee. The federal unemployment tax rate is 0.6%.