The following facts pertain to questions 1
The Scepter Shop recorded October sales of $185,000.
All sales are cash. Their one store is in an area with a 7.5% sales tax rate.
Cost of goods sold for these sales amounted to 112,000. The Scepter Shop must
pay its sales tax liability by the 15th day of the month following
the month of sales.
1. What accounts will be affected in the
transaction recording the October sales?
cash, sales tax expense, sales revenues
cash, sales tax payable, sales revenues
cash, sales revenues
cash, sales tax expense
2. When the sales taxes are paid on
November 15, what accounts are involved in this transaction?
cash, sales tax expense
accounts payable, sales tax expense
cash, sales tax payable
none of the above.
The following information pertained to
questions 3 through 5:
The Standard Company signed a note on
November 15, 2013 when it borrowed $25,000. The note had a maturity date of 90
days and an APR interest rate of 6 %.
3. What was the amount of interest to be
accrued on December 31, 2013? (Use the actual number of days method.)
4. What is the total amount of interest to
be accrued for 2014? (Use the actual number of days method.)
5. When the note is finally paid off by
Standard, which accounts are affected?
note receivable, interest expense
note payable, interest payable, cash
note receivable, interest expense, cash
note payable, interest expense, interest payable, cash
The following information pertains to
questions 6 through 8:
Larry, Moe and Curly work for Stooges,
Inc., which does not have a policy of paying time-and-a-half for hours worked
in excess of 40 per week. The following information relates to a recent week:
Rate # hours
worked Federal Income Tax withheld
Larry 7.50 45 15%
Moe 9.25 56 22%
Curly 8.50 38 20%
Social Security withholding is at 6%,
Medicare withholding is at 1.5%.
6. Calculate the total gross wages of all
three employees for the week.
7. What is the net pay of Curly for the
8. What is the total amount of
Social Security and Medicare taxes that Stooges must send to the government for
9. The Whipsaw Company wants to accumulate
$250,000 in 5 years in order to purchase a new machine. It prefers to make a
one-time payment to a bank account that will pay 4%. How much must the
single-sum payment be so that it will grow to $250,000 in 5 years at an APR of
10. The Quigley Company wants to set up a
fund to pay off a $125,000 loan in 8 years. It can invest the same sum of money
each year to an account that will pay 4%. What will Quigleyâ€™s annual
contribution to the fund be?