60.1K

Verified Solution

Link Copied!

1. In March, an explosion at a companys business, causing damage to local properties. By May, no claims had been asserted. However, management and legal counsel concluded that it was reasonably possible they would be held responsible for negligence, and that $4,000,000 would be a reasonable estimate of the damages.

2. On January 15, the end of the 1^st pay period of the year, NCOs employees earned $26,000 of salaries. Withholdings from the employees salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $2,000 of federal income taxes, $429 of medical insurance deductions, and $180 of union dues. No employees salary is above the$7,000. base for any taxes. The State Unemployment Tax rate is 3.5% and the Federal Rate is 0.8%. Both State and Federal Unemployment taxes are accessed on the first $7,000 of wages for each employee. REQUIRED A. Prepare the journal entry to record NCOs January 15 Salaries expense and related liabilities.

3. Founder Company sold $200,000 of copy machines during the year with a two-year warranty. Repairs average 3% in the first year and 2 % in the second year of warranty. Actual costs for warranty services were $3,170 for the first year. What is the balance for the warranty liability account at the end of the first year?

4) On January 1, 2018, Eddy Corporation issued $1,400,000 of 10% bonds at 103%. The bonds are callable at 101 (of face amount), and on January 2, 2020, they called the bonds and retired them. At the time of retirement, unamortized bond premium was $35,300. Prepare the journal entry to retire the bonds.

2018 bond payable	1400000
Jan 1 Loss on redemption of bond
Discount on issue of bond
Cash

Answer & Explanation Solved by verified expert

See Answer