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1. During the month, ABC Company delivered of the work to earn of the initial $2,000 recorded previously as unearned revenue. The adjusting entry to show some work had been completed and some revenue had been now earned would be:

Date	Accounts and Explanation	Debit	Credit

2. During the month, ABC Company purchased merchandise inventory with a 10%, 90-day note payable, for $1,000. The company uses the perpetual inventory system. The entry to record the note and purchase of the inventory is:

Date	Accounts and Explanation	Debit	Credit

3. Based on the information in letter d above, assume ABC Company pays the note when due 90 days later. The journal entry is (take interest expense to the nearest dollar):

Date	Accounts and Explanation	Debit	Credit

50. How do companies account for and record payroll?

1. List some of the common withholdings deducted from the employees pay:

3. iv)

2. Journalize the employer payroll taxes assuming that the FICA-OASDI Taxes is $400, FICA- Medicare Taxes is $100, Federal Unemployment Taxes is $10, and State Unemployment Taxes is $25.

Date	Accounts and Explanation	Debit	Credit

50. How are current liabilities that must be estimated accounted for?

1. To journalize the estimated cost of vacation benefits, the company will debit _____________ and credit __________________.
2. To journalize the amount of estimated cost of future warranty repairs, the company will debit _____________________ and credit ________________________.

50. How are contingent liabilities accounting for?

1. In your own word, what is a contingent liability?
2. What is a Remote Contingent Liability and is it recorded?
3. What is a Reasonably Possible Contingent Liability and is it recorded?
4. What is a Probable Contingent Liability?

50. How do we use the times-interest-earned ratio to evaluate business performance?

1. What is the formula for times-interest-earned?

2. If net income is $1,000, income tax expense is $100, and interest expense is $300, what is times-interest-earned (take to two decimal places)?

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