BE13-3 Takemoto Corporation borrowed $60,000 on November 1, 2014, by signing a $61,350, 3-month, zero-interest-bearing note. Prepare Takemoto's November 1, 2014, entry; the December 31, 2014, annual adjusting entry; and the February 1, 2015, entry.
BE13-8 Kasten, Inc., provides paid vacations to its employees. At December 31, 2014, 30 employees have earned 2 weeks of vacation time. The employees' average salary is $500 per week. Prepare Kasten's December 31, 2014, adjusting entry.
BE13-11 Buchanan Company recently was sued by a competitor for patent infringement. Attorneys have determined that it is possible that Buchanan will lose the case and that reasonable estimate of damages to be paid by Buchanan is $300,000. In light of this case, Buchanan is considering establishing a $100,000 self-insurance allowance. What entry(ies), if any, should Buchanan record to recognize this loss contingency?
EX13-2 (Accounts and Notes Payable) The following are selected 2014 transactions of Sean Astin Corporation.
Sept. 1 Purchased inventory form Encino Company on account for $50,000. Astin records purchases gross and uses a periodic inventory system.
Oct. 1 Issued a $50,000, 12-month, 8% note to Encino in payment of account.
Oct.1 Borrowed $50,000 from the Shore Bank by signing a 12-month, zero-interest-bearing $54,000 note.
(a)Prepare journal entries for the selected transactions above.
(b)Prepare adjusting entries at December 31.
(c)Compute the total net liability to be reported 31 balance sheet for:
(1)The total interest-bearing note.
(2)The zero-interest-bearing note.
EX13-9 (Payroll Taxes Entries) Green Bay Hardware Company payroll for November is summarized
Amount Subjected to Payroll Taxes
Payroll Wages Due FICA Federal State
Factory 120,000 120,000 40,000 40,000
Sales 32,000 32,000 4,000 4,000
Administrative 36,000 36,000 - - --
Total 188,000 188,000 44,000 44,000
At this point in the year, some employees have already received wages in excess of those to which payroll taxes apply. Assume that the state unemployment tax is 2.5%. The FICA rate is 7.65% on employee's wages to $113,700 and 1.45% in excess of $113,700. Of the $188,000 wages subject to FICA tax, $20,000 of the sales wages is in excess of $113,700. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $16,000 for factory, $7,000 for sales, and $6,000 for administrative.
(a)Prepare a schedule showing the employer's total cost of wages for November by function. (Round all computations to nearest dollar.)
(b)Prepare the journal entries to record the factory sales, and administrative payrolls including employer's payroll taxes.
EX13-12 (Premium Entries) No Doubt Company includes in each box of soap powder that it packs, and 100 coupons redeemable for a premium (a kitchen utensil). In 2014, No Doubt Company purchased 8,800 premiums ate 80 cents each and sold 110,000 boxes of soap powder at $3.30 per box; 44,000 coupons were presented for redemption in 2014. It is estimated that 60% of the coupons will eventually be presented for redemption.
Prepare all the entries that would be made relative to sales of soap powder and to the premium plan 2014.
P13-1 (Current Liability Entries and Adjustments) Described below are certain transactions of Edwardson Corporation. The company uses the periodic inventory system.
1.On February 2, the corporation purchased goods from Martin Company for $70,000 subject to cash discount terms of 2/10, n/30. Purchases and account payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid February 26.
2.On April 1, corporation bought a truck for $50,000 from General Motors Company, paying $4,000 in cash and signing a one-year, 12% note for the balance of the purchase price.
3.On May 1, the corporation borrowed $83,000 from Chicago National Bank by signing a $92,000 zero-interest-bearing note due one year May 1.
4.On August 1, the board of directors declared a $300,000 cash dividend that was payable on September 10 to stockholders of record on August 31.
(a)Make all the journal entries necessary to record the transactions above using appropriate dates.
(b)Edwardson Corporation's year-end is December 31. Assuming that no adjusting entries relative to the transactions above have been recorded, prepare any adjusting journal entries concerning interest that are necessary to present fair financial statements at December at December 31. Assume straight-line amortization of discounts.