Posted: April 17th, 2020

Utah State University – College of Eastern Utah Utah State University – College of Eastern Utah Which of the following items does not qualify as a contingent liability

Which of the following items does not qualify as a contingent liability?Loaning money to another party who may not be able to repayUnresolved environmental damage claims brought by the governmentNone of theseBeing named as a defendant in a lawsuitOn July 1, 20X1, a company borrows $100,000 on a 5% note, due in one year. Assume accrued interest was recorded on December 31. What accounts would be impacted at the time of repayment of the note and interest on June 30 20X2?Interest expense by 5,000Interest payable, by 2,500Notes payable by 105,000Cash by 100,000The beginning warranty liability was $25,000. Sales of $5,000000 were made, and 2% of sales is the estimated warranty cost. The ending balance of warranty liability was $35,000(credit). How much warrant work was performed?110,00010,00090,000100,000NoneLeonard recorded gross pay of $250,000. This is subject to employee’s portion of social security and Medicare taxes of $16,750. Unemployment taxes of $3,000, and federal tax withholding of $46,000. How much is payroll tax expense?16,75019,75036,5000Leonard recorded gross pay of $250,000. This is subject to employee’s portion of social security and Medicare taxes of $16,750. Unemployment taxes of $3,000, and federal tax withholding of $46,000. How much is salaries payable?None266,750315,750250,000253,000Sylvan company had sales of $1,500,000. Estimated warranty costs are 1% of sales. Work performed under warranties during the period actually cost $8,750. The entry to record the warranty liability includes:A debit to warranty expense for $15,000A debit to warranty expense for 6,250A debit to warranty expenseA debit to warranty expenseNone of theseWalban department store records all sales at amounts the includes 8% sales tax. During November total recorded sales were $706,320. What portion of these sales should be recorded as a tax liability?None of these056,505.6052,320654,000Federal income taxes should not be withheld fromOvertime wagesWages in excess of the social security baseA retiring employee’s last paycheckAmounts paid to independent contractorsnoneLeonard recorded gross pay of $250,000. This is subject to employee’s portion of social security and Medicare taxes of $16,750. Unemployment taxes of $3,000, and federal tax withholding of $46,000. How much is the employer’s total liability for this payroll?269,750223,750266,750250,000On April 1, 20X6, Owen issued $100,000 of 12%, 10-year bonds. The bonds were issued at par + accrued interest, are dated January 1, 20X6, and pay interest on July and January 1. The entry to record the issuance of the bonds will include:A debit to cash of 103,000A credit to bonds payable of 103,000A credit to interest income of 3,000None of theseA credit to cash of 100,000Ace retired a $10,000 bond by paying $11,000 cash. The payment included accrued interest of $250. At the date of retirement, the unamortized discount on the bonds was $400. How much is the loss on retirement?None of these03501,150750On June 1, Sao corporation issued $300,000 of 9%, 5-year bonds. The bonds were issued at 97, pay interest on January 1 and June1. The entry to record issuance of the bonds includes:A credit to bonds payable of $291,000A credit to cash of 300,000A debit to discount on notes payable of 9,000A credit to interest payable of 9,000On January 1, 20X1, Perkins issued $100,000 face, 8%, 5-year bonds at $92,278. The bonds pay interest annually and were priced to yield 10%. Using the effective interest method, how much is interest expense for 20X1?8,0009,227.809,544.409,258.50None of the aboveWhich of the following statements about bonds is true?Once outstanding, bonds may not be bought or soldBonds must be issued at face valueInterest is not accrued on bonds outstanding at year endAll bonds have a face valueNone of theseHutton Corporation issued $100,000 of 7%, 15-year bonds on June 1, 20X6(dated April 1 20X6) at 101 plus accrued interest, which is is paid on April 1 and October 1. The proper entry to record issuance of the bonds includes a debit to cash for:102,167101,000101,167100,000None of the aboveGaines originally issued 15,000 shares of $10 par value common stock at $15 per share. During the current year, 1000 of these shares were reacquired for $20 each. The proper entry to record the re-acquisition includes:A debit to retained earnings for 5,000A debit to treasury stock for 15,000A debit to treasury stock for 10,000A debit to treasury stock for 20,000None of the above

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