Concept explainers
Concept Introduction:
Financial statements:
Financial statements are prepared to summaries the account at the end of the period. The statements prepared are Income statement,
Balance Sheet:
The Balance sheet is a summary of Assets, Liabilities and equity accounts that reports the financial position of the business as on a specific date. Assets are further classifies into Current Assets, Long Term Investments, Plant Assets and Intangible assets. And Liabilities are further classified into Current Liabilities and Long term liabilities.
Basic Earnings per share:
The Basic Earnings per share is the amount of net income earned by each common share outstanding. The Earnings per share calculated by with help of following formula:
To Indicate:
The effect of payroll taxes on Net Assets and Earnings per share
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Survey of Accounting (Accounting I)
- Recording payroll and payroll taxes The following information about the payroll for the week ended October 4 was obtained from the records of Simkins Mining Co.: Instructions Determine the following amounts for the employer payroll taxes related to the October 4 payroll: (a) FICA tax payable, (b) state unemployment tax payable, and (c) federal unemployment tax payable.arrow_forwardRecording payroll and payroll taxes The following information about the payroll for the week ended October 4 was obtained from the records of Simkins Mining Co.: Instructions Illustrate the effect on the accounts and financial statements of recording the October 4 payroll.arrow_forwardRecording payroll and payroll taxes The following information about the payroll for the week ended October 4 was obtained from the records of Simkins Mining Co.: Instructions For the October 4 payroll, determine the employee FICA tax payable.arrow_forward
- Recording payroll and payroll taxes The following information about the payroll for the week ended October 4 was obtained from the records of Simkins Mining Co.: Instructions Illustrate the effect un (he accounts and financial statements of recording the liability for the October 4 employer payroll taxes.arrow_forwardOn September 30, Hilltop Companys selected payroll accounts are as follows: Prepare general journal entries to record the following: Oct. 15 Payment of federal tax deposit of FICA taxes and the federal income tax. 31 Payment of state unemployment tax. 31 Payment of federal unemployment tax.arrow_forwardExplain the difference between gross earnings and net earnings for a payroll period.arrow_forward
- On September 30, Cody Companys selected account balances are as follows: In general journal form, prepare the entries to record the following: Oct. 15Payment of liabilities for FICA taxes and the federal income tax. 31Payment of liability for state unemployment tax. 31Payment of liability for federal unemployment tax.arrow_forwardIndicate how a company computes the amount of interest and income taxes that it paid during the year.arrow_forwardComplete Accounting Services has the following payroll information for the week ended December 7. State income tax is computed as 20 percent of federal income tax. NAME BEGINNINGCUMULATIVEEARNINGS TOTAL EARNINGS DEDUCTIONS FEDERALINCOME TAX STATEINCOME TAX Denato, T. 6,820.00 480.00 24.00 4.80 Herrera, M. 6,840.00 470.00 23.00 4.60 Joyner, J. 36,320.00 740.00 58.00 11.60 King, L. 26,200.00 540.00 30.00 6.00 Wilson, M. 116,060.00 2,720.00 456.78 91.36 Yee, N. 28,426.00 605.00 37.00 7.40 Assumed tax rates are as follows: FICA: Social Security, (employer) 6.2 percent (0.062) and (employee) 6.2 percent (0.062) on the first $118,500 for each employee, and Medicare, 1.45 percent (0.0145) on all earnings for each employee. State unemployment tax, 5.4 percent (0.054) on the first $7,000 for each employee. Federal unemployment tax, 0.6 percent (0.006) on the first $7,000 for each employee.a. Prepare a general journal entry to record the payroll as of December 7. The…arrow_forward
- Complete Accounting Services has the following payroll information for the week ended December 7. State income tax is computed as 20 percent of federal income tax. NAME BEGINNINGCUMULATIVEEARNINGS TOTAL EARNINGS DEDUCTIONS FEDERALINCOME TAX STATEINCOME TAX Denato, T. 6,820.00 480.00 24.00 4.80 Herrera, M. 6,840.00 470.00 23.00 4.60 Joyner, J. 36,320.00 740.00 58.00 11.60 King, L. 26,200.00 540.00 30.00 6.00 Wilson, M. 116,060.00 2,720.00 456.78 91.36 Yee, N. 28,426.00 605.00 37.00 7.40 Assumed tax rates are as follows: FICA: Social Security, (employer) 6.2 percent (0.062) and (employee) 6.2 percent (0.062) on the first $118,500 for each employee, and Medicare, 1.45 percent (0.0145) on all earnings for each employee. State unemployment tax, 5.4 percent (0.054) on the first $7,000 for each employee. Federal unemployment tax, 0.6 percent (0.006) on the first $7,000 for each employee. Required: 1. Complete the payroll register. Payroll checks begin with Ck.…arrow_forwardComplete Accounting Services has the following payroll information for the week ended December 7. State income tax is computed as 20 percent of federal income tax. NAME BEGINNINGCUMULATIVEEARNINGS TOTAL EARNINGS DEDUCTIONS FEDERALINCOME TAX STATEINCOME TAX Denato, T. 6,820.00 480.00 24.00 4.80 Herrera, M. 6,840.00 470.00 23.00 4.60 Joyner, J. 36,320.00 740.00 58.00 11.60 King, L. 26,200.00 540.00 30.00 6.00 Wilson, M. 116,060.00 2,720.00 456.78 91.36 Yee, N. 28,426.00 605.00 37.00 7.40 Assumed tax rates are as follows: FICA: Social Security, (employer) 6.2 percent (0.062) and (employee) 6.2 percent (0.062) on the first $118,500 for each employee, and Medicare, 1.45 percent (0.0145) on all earnings for each employee. State unemployment tax, 5.4 percent (0.054) on the first $7,000 for each employee. Federal unemployment tax, 0.6 percent (0.006) on the first $7,000 for each employee. Required: 1. Complete the payroll register. Payroll checks begin with Ck.…arrow_forwardJournalize Payroll Tax The payroll register of Heritage Co. indicates $3,900 of social security withheld and $975 of Medicare tax withheld on total salaries of $65,000 for the period. Earnings of $10,000 are subject to state and federal unemployment compensation taxes at the federal rate of 0.8% and the state rate of 5.4%. Journalize the entry to record the payroll tax expense for the period. Refer to the Chart of Accounts for exact wording of account titles.arrow_forward
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