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A company estimates that warranty expense will be 4% of sales.The company's sales for the current period are $185,000.The current period's entry to record the warranty expense is:


A) A company estimates that warranty expense will be 4% of sales.The company's sales for the current period are $185,000.The current period's entry to record the warranty expense is: A) B) C) D) E) No entry is recorded until the items are returned for warranty repairs.
B) A company estimates that warranty expense will be 4% of sales.The company's sales for the current period are $185,000.The current period's entry to record the warranty expense is: A) B) C) D) E) No entry is recorded until the items are returned for warranty repairs.
C) A company estimates that warranty expense will be 4% of sales.The company's sales for the current period are $185,000.The current period's entry to record the warranty expense is: A) B) C) D) E) No entry is recorded until the items are returned for warranty repairs.
D) A company estimates that warranty expense will be 4% of sales.The company's sales for the current period are $185,000.The current period's entry to record the warranty expense is: A) B) C) D) E) No entry is recorded until the items are returned for warranty repairs.
E) No entry is recorded until the items are returned for warranty repairs.

F) C) and D)
G) None of the above

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On September 15,Sports World borrowed $75,000 cash from First Bank on a 12%,60-day note payable. a.Prepare Sports World's general journal entry to record the issuance of the note payable. b.Prepare Sports World's general journal entry to record the payment of the note at maturity assuming no adjusting entries have been made since the note was first issued.

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a. blured image_TB6947_00_TB6947...

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Unearned revenue is initially recognized with a:


A) Credit to unearned revenue.
B) Credit to revenue.
C) Debit to revenue payable.
D) Debit to revenue.
E) Debit to unearned revenue.

F) A) and D)
G) C) and D)

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If the times interest ratio:


A) Increases,then risk increases.
B) Increases,then risk decreases.
C) Is greater than 1.5,then the company is in default.
D) Is less than 1.5,the company is carrying too little debt.
E) Is greater than 1.5,the company is likely carrying too much debt.

F) B) and C)
G) None of the above

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Employer payroll taxes are an added employee _______________ beyond the wages and salaries earned by the employees.

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__________ allowances are items that reduce the amount of federal income taxes owed by the individual.

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Explain how to calculate times interest earned and how this ratio is used to analyze a company.

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The times interest earned ratio is calcu...

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A corporation has a $42,000 credit balance in the Income Tax Payable account.Period-end information shows that the actual liability is $50,000.The company should record an entry to debit Income Tax Expense for $8,000 and credit Income Taxes Payable for $8,000.

A) True
B) False

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A company's income before interest expense and income taxes was $395,000 in 2013 and $427,000 in 2014.Its fixed interest expense was $125,000 for both years.Calculate the company's times interest earned ratio and comment on its level of risk.

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2013: $395,000/$125,000 = 3.16 2014: $42...

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Employers must keep certain payroll records,including individual earnings reports for each employee.

A) True
B) False

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The rate for FICA Social Security is 6.2% and the rate for FICA Medicare is 1.45%.Calculate the total amount of FICA withholding for an employee whose pay is $2,400 and is entirely subject to these FICA taxes.

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blured image_TB6947_00...

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Unearned revenues are listed on the balance sheet under liabilities.

A) True
B) False

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Employee vacation benefits:


A) Are estimated liabilities.
B) Are contingent liabilities.
C) Are recorded as an expense when the employee takes a vacation.
D) Are recorded as an expense when the employee retires.
E) Increase net income.

F) C) and D)
G) B) and E)

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