A company has three employees. Total salaries for the month of January were $8,000. The federal income tax withheld was a total of $1,200. The FICA—social security tax rate is 6.2% and the FICA—Medicare tax rate is 1.45%.

Calculate the amount of employee taxes withheld and prepare the company's journal entry to record the January payroll assuming these were the only deductions:

A company purchased a delivery van on October 1 of the current year at a cost of $40,000. The van is expected to last six years and has a salvage value of $2,200. The company's annual accounting period ends on December 31.   

   

What is the depreciation expense for the current year, assuming the straight-line method is used?   

What is the book value of the van at the end of the first year?

 

Woods Company uses a perpetual inventory system and accepts the World Express bank credit card from its customers. World Express charges a 3.5% service fee. On February 28, Woods sold $24,000 worth of merchandise to customers (that had cost $14,400) using the World Express charge card. Prepare the journal entries to record February 28 sales

 

Carolina Company uses the   perpetual LIFO method for valuing its ending inventory. The following financial statement information is available for its first year of operation:   

   

Carolina Company

Income Statement

 

For the year ended December 31

Sales                    $ 60,000

Cost of goods sold  23,000

Gross profit             $ 37,000

Expenses                    13,000

Income before taxes $ 24,000

 

 Carolina's ending inventory using the   perpetual LIFO method was $8,700. Carolina's accountant determined that had the company used   perpetual FIFO, the ending inventory would have been $9,100.   

 

 a. Determine what the income before taxes would have been, had Carolina used the FIFO method of inventory valuation instead of LIFO?

 

 b. What would be the difference in income taxes between LIFO and FIFO, assuming a 30% tax rate?   

c. If Carolina wanted to lower the amount of income taxes to be paid, which method would it choose?

 

Andrew's net income was $280,000; its total assets were $1,050,000; and its net sales were $3,500,000. Calculate the company's profit margin ratio.

 

A company completed the following transactions:

a. Purchased land valued at $80,000 and a building valued at $320,000. The purchase is paid for with $60,000 cash and a note payable for $340,000.
b. Paid $500 cash for an insurance premium covering the next 12 months.
c. Completed office services for a customer and collected $1,000 cash.
d. Paid $200 cash for office supplies.
e. Paid $2,000 for October's rent.

Required:

1) Prepare journal entries to record the above transactions? Explanations are unnecessary?

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