For all payroll calculations, use the following tax rates and round amounts to the nearest cent Employee: OASDI: 6.2% on first $118,500 earned; Medicare 1.45% up to $200,000, 2.35% on earnings above $200,000. Employer: OASDI: 6.2% on first $118,500 earned; Medicare: 1.45%; FUTA: 0.6% on first $7,000 earned; SUTA: 5.4% on first $7,000 earned. Accounting for warranty expense and warranty payable Trail Runner guarantees its snowmobiles for three years. Company experience indicates that warranty costs will be approximately 5% of sales. Assume that the Trail Runner dealer in Colorado Springs made sales totaling $600,000 during 2018. The company received cash for 20% of the sales and notes receivable for the remainder. Warranty payments totaled $10,000 during 2018. Requirements Record the sales, warranty expense, and warranty payments for the company to Ignore the cost of goods sold. Assume the Estimated Warranty Payable is JO on January 1, 2018. Post the 2018 transactions to the Estimated Warranty Payable T-account. At the end of 2018 how much in Estimated Warranty Payable does the company owe?
For all payroll calculations, use the following tax rates and round amounts to the nearest cent Employee: OASDI: 6.2% on first $118,500 earned; Medicare 1.45% up to $200,000, 2.35% on earnings above $200,000. Employer: OASDI: 6.2% on first $118,500 earned; Medicare: 1.45%; FUTA: 0.6% on first $7,000 earned; SUTA: 5.4% on first $7,000 earned. Accounting for warranty expense and warranty payable Trail Runner guarantees its snowmobiles for three years. Company experience indicates that warranty costs will be approximately 5% of sales. Assume that the Trail Runner dealer in Colorado Springs made sales totaling $600,000 during 2018. The company received cash for 20% of the sales and notes receivable for the remainder. Warranty payments totaled $10,000 during 2018. Requirements Record the sales, warranty expense, and warranty payments for the company to Ignore the cost of goods sold. Assume the Estimated Warranty Payable is JO on January 1, 2018. Post the 2018 transactions to the Estimated Warranty Payable T-account. At the end of 2018 how much in Estimated Warranty Payable does the company owe?
College Accounting (Book Only): A Career Approach
12th Edition
ISBN:9781305084087
Author:Cathy J. Scott
Publisher:Cathy J. Scott
Chapter8: Employer Taxes, Payments, And Reports
Section: Chapter Questions
Problem 2PB
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Question
For all payroll calculations, use the following tax rates and round amounts to the nearest cent
Employee: OASDI: 6.2% on first $118,500 earned; Medicare 1.45% up to $200,000, 2.35% on earnings above $200,000.
Employer: OASDI: 6.2% on first $118,500 earned; Medicare: 1.45%; FUTA: 0.6% on first $7,000 earned; SUTA: 5.4% on first $7,000 earned.
Accounting for warranty expense and warranty payable
Trail Runner guarantees its snowmobiles for three years. Company experience indicates that warranty costs will be approximately 5% of sales.
Assume that the Trail Runner dealer in Colorado Springs made sales totaling $600,000 during 2018. The company received cash for 20% of the sales and notes receivable for the remainder. Warranty payments totaled $10,000 during 2018.
Requirements
- Record the sales, warranty expense, and warranty payments for the company to Ignore the cost of goods sold.
- Assume the Estimated Warranty Payable is JO on January 1, 2018.
Post the 2018 transactions to the Estimated Warranty Payable T-account. At the end of 2018 how much in Estimated Warranty Payable does the company owe?
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