E 11-8
|
Current ratio |
= |
Total current assets |
= |
$490,000 |
= |
1.88 |
|
Total current liabilities |
$260,000 |
Ciliotta should pay off $30,000 of current liabilities. Then the current ratio will be:
|
$490,000 ! $30,000 |
= |
$460,000 |
= |
2.00 |
|
$260,000 ! $30,000 |
$230,000 |
(10-15 min.)
E 11-9|
Gross pay: $750 + ($80,000 ´ .10) |
$8,750.00 |
|
|
Deductions: |
||
|
Charitable contribution |
$ 25.00 |
|
|
Health insurance |
22.50 |
|
|
Income tax ($8,750 ´ .10) |
875.00 |
|
|
FICA tax [($75,000 ! $72,140) ´ .08] |
228.80 |
(1,151.30 ) |
|
Net pay |
$7,598.70 |
|
(10-15 min.)
E 11-10Req. a (gross pay and net pay)
|
Straight-time earnings for 40 hours (40 ´ $6) |
$240.00 |
|
|
Overtime pay for the next 10 hours: |
||
|
10 hours ´ $6 ´ 1.5 |
90.00 |
|
|
Total gross pay for the week |
$330.00 |
|
|
Deductions: |
||
|
Withheld income tax ($330 ´ .07) |
$ 23.10 |
|
|
FICA tax ($330 ´ .08) |
26.40 |
|
|
United Fund contribution |
5.00 |
|
|
Total deductions |
(54.50 ) |
|
|
Net pay |
$275.50 |
|
Req. b (employer’s payroll entry)
|
Journal |
|||||
|
DATE |
ACCOUNTS AND EXPLANATIONS |
POST. REF. |
DEBIT |
CREDIT |
|
|
Wage Expense |
330.00 |
||||
|
Employee Income Tax Payable |
23.10 |
||||
|
FICA Tax Payable |
26.40 |
||||
|
Employee United Fund |
|||||
|
Contribution Payable |
5.00 |
||||
|
Wages Payable |
275.50 |
||||
(10-15 min.)
E 11-11|
Journal |
|||||
|
DATE |
ACCOUNTS AND EXPLANATIONS |
POST. REF. |
DEBIT |
CREDIT |
|
|
Entry for payroll taxes: |
|||||
|
Payroll Tax Expense |
7,636.20 |
||||
|
FICA Tax Payable |
|||||
|
($88,400 ´ .08) |
|
7,072.00 |
|||
|
State Unemployment Tax |
|||||
|
Payable ($9,100 ´ .054) |
491.40 |
||||
|
Federal Unemployment Tax |
|||||
|
Payable ($9,100 ´ .008) |
72.80 |
||||
|
Entry for benefits: |
|||||
|
Health Insurance Expense for |
|||||
|
Employees |
2,062.15 |
||||
|
Life Insurance Expense for |
|||||
|
Employees |
351.07 |
||||
|
Pension Expense ($92,000 ´ .08) |
7,360.00 |
||||
|
Employee Benefits Payable |
9,773.22 |
||||
(10 min.)
E 11-12|
Income statement: |
|
|
Expenses: |
|
|
Salary expense |
$900,000 |
|
Payroll tax expense ($900,000 ´ .09) |
81,000 |
|
Balance sheet: |
|
|
Current liabilities: |
|
|
Salary payable |
$ 4,000 |
|
Payroll tax payable |
1,000 |