1. The payroll of Yellow Stone Company for September 2025 is as follows (6 points). Total...

 

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1. The payroll of Yellow Stone Company for September 2025 is as follows (6 points). Total payroll was $500,100, of which $100.000 is paid to certain employees who had earned more than $142,800 by the end of September. The amount paid to employees who had earned more than $7,000 was $450,000. Income taxes in the amount of $80,000 were withheld, as was $9,000 in union dues. The state unemployment tax is 1.2% and the federal unemployment tax rate is 0.8%. Also, assume that the current FICA tax is 7.65% on an employee's wages to $142,800 and 1.45% in excess of $142,800. Required: (a) Make a journal entry to record employee payroll deductions. (b) Make a journal entry to record employer payroll taxes. (c) Make a journal entry to record payroll liabilities. 2. On 12/31/2025, Tamarisk Company had $2,500,000 of short-term debt in the form of notes payable due 2/2/2026. The 12/31/2025 balance sheet was issued on 2/23/2026. The following scenarios are independent. Highlight all scenarios where the $2,500,000 notes payable can be classified as long-term liability on the 12/31/2025 balance sheet (4 points). (a) On 1/31/2026, the Company borrowed $2,500,000 cash from Seashore Bank for 6 months. On 2/2/2026, $2,500,000 from the 6-month loan were used to liquidate the $2,500,000 debt. (b) On 1/31/2026, the Company borrowed $2,500,000 cash from Seashore Bank for 3 years. On 2/2/2026, $2,500,000 from the 3-year loan were used to liquidate the $2.500.000 debt. (c) On 1/31/2026, the Company reached an agreement with the creditor that the Company will transfer a piece of land as the payment for the $2,500,000 note payable. On 2/2/2026, the Company liquidated the $2,500,000 debt by transferring the land to the creditor. (d) On 12/30/2025, the Company issued its common stock to raise $3,000,000. On 2/2/2021, the Company liquidated the $2,500,000 debt using the proceeds from the stock issuance. (e) On 1/31/2026, the Company issued its common stock to raise $3,000,000. On 2/2/2021, the Company liquidated the $2,500,000 debt using the proceeds from the stock issuance. 1. The payroll of Yellow Stone Company for September 2025 is as follows (6 points). Total payroll was $500,100, of which $100.000 is paid to certain employees who had earned more than $142,800 by the end of September. The amount paid to employees who had earned more than $7,000 was $450,000. Income taxes in the amount of $80,000 were withheld, as was $9,000 in union dues. The state unemployment tax is 1.2% and the federal unemployment tax rate is 0.8%. Also, assume that the current FICA tax is 7.65% on an employee's wages to $142,800 and 1.45% in excess of $142,800. Required: (a) Make a journal entry to record employee payroll deductions. (b) Make a journal entry to record employer payroll taxes. (c) Make a journal entry to record payroll liabilities. 2. On 12/31/2025, Tamarisk Company had $2,500,000 of short-term debt in the form of notes payable due 2/2/2026. The 12/31/2025 balance sheet was issued on 2/23/2026. The following scenarios are independent. Highlight all scenarios where the $2,500,000 notes payable can be classified as long-term liability on the 12/31/2025 balance sheet (4 points). (a) On 1/31/2026, the Company borrowed $2,500,000 cash from Seashore Bank for 6 months. On 2/2/2026, $2,500,000 from the 6-month loan were used to liquidate the $2,500,000 debt. (b) On 1/31/2026, the Company borrowed $2,500,000 cash from Seashore Bank for 3 years. On 2/2/2026, $2,500,000 from the 3-year loan were used to liquidate the $2.500.000 debt. (c) On 1/31/2026, the Company reached an agreement with the creditor that the Company will transfer a piece of land as the payment for the $2,500,000 note payable. On 2/2/2026, the Company liquidated the $2,500,000 debt by transferring the land to the creditor. (d) On 12/30/2025, the Company issued its common stock to raise $3,000,000. On 2/2/2021, the Company liquidated the $2,500,000 debt using the proceeds from the stock issuance. (e) On 1/31/2026, the Company issued its common stock to raise $3,000,000. On 2/2/2021, the Company liquidated the $2,500,000 debt using the proceeds from the stock issuance.

Answer rating: 100% (QA)

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