Sean's gross pay for this month is $9,150. His gross year-to-date pay, prior to this month, totaled $112,500. Sean's rate for federal income tax is 28%. His voluntary deductions total $1,050. What is Sean's net pay? (Assume an OASDI rate of 6.2%, applicable on the first $117,000 earnings, and a Medicare rate of 1.45%, applicable on all earnings.)
A) $6,176.32
B) $5,538.00
C) $6,588.00
D) $5,126.32
White Hat Digital, Inc. starts the year with a credit balance of $3,500 in its Estimated Warranty Payable account. During the year, there were $224,000 in sales and $4,800 in warranty repair payments. White Hat Digital estimates warranty expense at 2% of sales. At the end of the year, what is the balance in the Estimated Warranty Payable account?
A) $4,480 debit
B) $4,800 credit
C) $3,500 debit
D) $3,180 credit
A contingency was evaluated at year-end and considered to have a remote possibility of becoming an actual liability. If this was not reported on the balance sheet or in the notes to the financial statements, what effect would this have on the financial reporting of the company?
A) There would be no effect.
B) The liabilities on the balance sheet would be understated.
C) The information about the transaction would be inadequately disclosed in the notes.
D) The net income of the company would be understated.
The information related to interest expense of Stereo Music, Inc. is given below:
Net income $264,000
Income tax expense 107,000
Interest expense 66,000
Based on the above data, which of the following is the times-interest-earned ratio?
A) 4.08 times
B) 4 times
C) 6.62 times
D) 5 times
On March 1, 2016, Emerson Services issued a 4% long-term notes payable for $16,000. It is payable over a 4-year term in $4,000 annual principal payments on March 1 of each year plus interest, beginning March 1, 2017. Each yearly installment will include both principal repayment of $4,000 and interest payment for the preceding one-year period. On March 1, 2017, ________. The accounting period ends on December 31.
A) Emerson must accrue $4,000 of Interest Expense
B) Emerson must accrue the coming $4,000 as the current portion of principal payment
C) Emerson must pay $640 of interest to the note holder
D) Emerson will receive $4,000 as an installment payment