ACC 205 Week 4 Assignment Liability

ACC 205 Week 4 Assignment Liability

ACC 205 Week 4 Assignment Liability



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Liability. Please complete each of the exercises below in a word document. Save the document, and

submit it in the appropriate week using the Assignment Submission button.

1. Payroll accounting. Assume that the following tax rates and payroll information pertain to Brookhaven

Publishing:

Social Security taxes: 6% on the first $55,000 earned per employee

Medicare taxes: 1.5% on the first $130,000 earned per employee

Federal income taxes withheld from wages: $7,500

State income taxes: 4% of gross earnings

Insurance withholdings: 1% of gross earnings

State unemployment taxes: 5.4% on the first $7,000 earned per employee

Federal unemployment taxes: 0.8% on the first $7,000 earned per employee

The company incurred a salary expense of $50,000 during February. All employees had earned

less than $5,000 by month-end and no wages have been paid during the month.

a. Prepare the necessary entry to record Brookhaven’s February payroll. The entry will

include deductions for the following:

Social Security taxes

Medicare taxes

Federal income taxes withheld

State income taxes

Insurance

b. Prepare the journal entry to record Brookhaven’s payroll tax expense. The entry will

include the following:

Matching Social Security taxes

Matching Medicare taxes

State unemployment taxes

Federal unemployment taxes

2. Current liabilities: entries and disclosure. A review of selected financial activities of Visconti’s

during 20XX disclosed the following:

Instructions

a. Prepare journal entries to record the transactions.

b. Prepare adjusting entries on December 31 to record accrued interest.

c. Prepare the Current Liability section of Red Bank’s balance sheet as of December 31. Assume

that the Accounts Payable account totals $203,600 on this date....

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