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Prepare the journal entries for the eight following transactions. Use dates but descriptions are not required.

 

On 10/1/15, Equipment was purchased for $10,000 cash down payment and a 10% per annum promissory note of $40,000.

 


 

On 12/31/15, the fiscal year ended and the accrued interest was recorded as an adjusting entry.

 


 

On June 30, 2016 the note was paid in full. No interest has been accrued in 2016 yet.

 


 

There are 10,000 shares of $2 par common stock outstanding. The board of directors declares a 15 cent dividend per share on May 15, 2016.

 


 

On June 30, the above declared dividend is paid to holders of record as of June 20, 2016

 


 

There are 8,000 shares of $10 par common stock outstanding. On July 15, 2016 the market value of the stock is $72 per share and the board of directors declares a 10% stock divi

 


 

On July 30, 2016 the above shown stock dividend is paid to holders of record as of July 20.

 


 

On August 10, 2016 the board of directors declares a 2-for-1 stock split of 50,000 outstanding shares of $15 par value common stock.

 


 

% stock dividend.

 


 

Examine the following items and prepare the current liabilities section of the

 

Balance sheet for Annapolis Corporation as of December 31, 2015

 

The beginning of year accounts payable was $82,000. Purchases on

 

trade accounts during the year were $452,000, and payments on

 

account were $415,000.

 

The company incurs substantial costs in its manufacturing plant. As of

 

December 31, 2015, it is estimated that $38,000 of electricity has

 

been used. The monthly billing for December has not yet been

 

received.

 

Annapolis Corporation has accepted deposits from customers in

 

advance for product that will not ship until 2016 in the amount of

 

$174,500.

 

Annapolis Corporation has collected sales tax totaling $6,800 from

 

customers during the month of December, 2015. This tax must be

 

remitted to the state by January 10, 2016.

 

Annapolis Corporation has $2,000,000 outstanding on a bank loan.

 

The interest rate is 7.5% per annum and the interest is paid monthly

 

on the first day of each month for the prior month.

 

The loan listed above has principle repayment obligations equally

 

spread over eight years beginning in 2016.

 


 

Annapolis Corporation

 

Partial Balance Sheet as of December 31, 2015

 

Current Liabilities

 


 

Total Current Liabilities

 


 

$

 


 

-

 


 

Payroll problem. The facts and instructions are listed below:

 

1

 


 

Mike works for Baltimore Corp. Fact's related to Mike's paycheck are listed below. He is paid $5,000 once per month on the last day of the month. He has already been pai

 

payroll.

 


 

2

 


 

Mike's pay is subject to social security taxes at a 6.2% rate and Medicare at a 1.45% rate. He has not exceeded the annual base for social security taxes. Assume the compa

 

the 3rd business day after pay day.

 


 

3

 

4

 


 

Assume Mike's income tax withholding to be equal to $15% for Federal and 5% for Maryland. Assume that both of these withheld taxes will be remitted on the 3rd busines

 

Baltimore Corp. pays for workers' compensation insurance at a 3.5% rate. None of this cost is paid by the employee.

 


 

5

 


 

Baltimore Corp provides its employees with health care insurance, and pays 80% of the $600 per employee monthly premium. The other 20% is paid by employees via payr

 

a pre-tax plan for health insurance premiums.

 


 

6

 


 

Mike participates in a tax-sheltered deferred savings plan (401k plan) and has 6% of his gross pay withheld each month. Baltimore Corp provides a 100% matching contribu

 

match after 5%. This is sent to the investment company on the 10th of the following month.

 


 

7

 


 

Baltimore Corp's payroll is subject to federal (FUTA) tax of 6.2% of the first $7,000 of employee pay per year. The payroll is also subject to Maryland unemployment tax (SUT

 

per year. Both taxes are paid by the employer and the employee does not have these taxes withheld.

 


 

8

 


 

Mike participates in the Charitable giving program to donate money to Baltimore Habitat for Humanity each month. $25 is withheld from his check and sent to the charity b

 

month.

 

(a) Calculate Mikes net pay check in the space provided below.

 

(b) Prepare journal entries for Mike's pay and the related payroll expenses.

 

(c) What is the total cost to Baltimore Corp for Mike's services during

 

February?

 

(a)

 


 

(b)

 


 

(c)

 


 

en paid for January. You are computing February

 


 

company will remit this tax and any employer match on

 


 

usiness day after pay day.

 


 

ia payroll withholdings. The company has established

 


 

ntribution of the first 5% of worker pay. There is no

 


 

ax (SUTA) of 4.0% of the first $8,500 of employee pay

 


 

harity by Baltimore Corp on the 10th of the following

 


 

Allocate income to partners

 

Partnership Facts:

 

1. John, Alice and Dan are all general partners of a partnership.

 

2. John is the CEO of the partnership and is allocated a salary of $90,000 per year.

 

3. Alice is the CFO of the partnership and is allocated a salary of $72,000 per year.

 

4. Dan is not active in the partnership and is not allocated any salary.

 

5. All partners are allocated an interest credit from earnings of 5% of their capital account balance before any allocations.

 

6. The remaining profit or loss after the above allocations is split evenly three ways.

 

7. Capital account balance before allocations are as follows:

 

John $150,000.

 

Alice $120,000.

 

Dan $258,000.

 

8. The net income before any allocations are made is $141,000.

 

9. Assume that no money is distributed at this time but earnings are allocated to partner capital accounts.

 

Allocate the net income to partners based on the above partnership terms and prepare allocation journal entries.

 

John

 


 

Alice

 


 

Dan

 


 

Totals

 


 

 


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