会计学原理 Chapter11 CURRENT LIABILITIES AND PAYROLL ACCOUNTING

2008: 1.45% of all wages earned in the
year.
Employers must pay withheld taxes to the Internal Revenue Service (IRS).
P2 EMPLOYEE INCOME TAX
Federal Income Tax
existing $5,000 account payable to Carter. Matrix would make the following entry:
Aug 1
DR
CR
Accounts Payable - Carter 5,000
Notes Payable - Carter
5,000
To replace customer account with note.
Cash
8,160
To record payment of note
$8,000 × 12% × (45 ÷ 360) = $120
P2 PAYROLL LIABILITIES
Employers incur expenses and liabilities from having employees.
$20,000 × 6% × (90 ÷ 360) = $300
DR
CR
Notes payable
20,000
Interest expense
300
Cash
20,300
To record payment of note and interest
END-OF-PERIOD
P1
ADJUSTMENT
TO NOTES
P1
ADJUSTMENT
TO NOTES
On February 14, 2010, James Burrows
would make the following entry.
Feb 14
DR
CR
Notes payable
8,000
Interest payable
40
Interest expense
120
Dec. 31, 2009
Feb. 14, 2010
Note Date
End of Period
Maturity Date
James Burrows borrowed $8,000 on Dec. 16, 2009, by signing a 12%, 60-day note payable.
END-OF-PERIOD
Federal Insurance Contributions Act (FICA)
FICA Taxes — Soc. Sec.
2008: 6.2% of the first $102,200 earned in the year ( Max = $6,324).
FICA Taxes — Medicare
Employers owe voluntary amounts withheld from employees’ gross pay to the designated agency.
P2 RECORDING EMPLOYEE PAYROLL DEDUCTIONS
The entry to record payroll expenses and deductions for an employee might look like this.
Oct 30
Notes payable - Carter 5,000
Interest expense
150
Cash
5,150
To record payment of note and
i nter est
NOTE GIVEN TO P1 BORROW FROM BANK
PROMISSORY NOTE
EMPLOYEE PAYROLL
P2
DEDUCTIONS
Gross Pay
FICA Taxes
Medicare Taxes
Federal Income Tax
State and Local Voluntary Income Taxes Deductions
Net Pay
P2 EMPLOYEE FICA TAXES
party to take place on July 12, 2009.
May 1
Cash Unearned Revenue - Catering
To record advance payment.
DR 3,000
CR 3,000
Jul 12
DR Unearned Revenue - Catering 3,000
Revenue - Catering
To recognize revenue earned.
CR 3,000
SHORT-TERM NOTES
P1
PAYABLE
Байду номын сангаас
A written promise to pay a specified amount on a definite future date within one
DR
Jan. 31 Salaries Expense
Expected not to be paid within one year or the company’s operating cycle,
whichever is longer.
CURRENT AND LONG-
C1
TERM LIABILITIES
Current Liabilities as a Percent of Total Liabilities
EMPLOYEE VOLUNTARY
P2
DEDUCTIONS
Voluntary Deductions Amounts withheld depend on the employee’s request.
Examples include union dues, savings accounts, pension contributions, insurance premiums, and charities
On May 15, 2009, Max Hardware sold tools and supplies for $7,500 that are subject to a
6% sales tax.
DR
CR
May 15 Cash
7,950
Sales
7,500
Sales Taxes Payable
450
are due in 90 days (November 30, 2009).
Sep 1
DR
CR
Cash
20,000
Notes payable
20,000
To record note to American Bank.
P1 FACE VALUE EQUALS AMOUNT BORROWED
On November 30, 2009, Smith would make the following entry:
To record cash sales and 6% sales tax.
$7,500 × 6% = $450
C 2 UNEARNED REVENUES
On May 1, 2009, A-1 Catering received $3,000 in advance for catering a wedding
会计学原理 Chapter11 CURRENT LIABILITIES AND
PAYROLL ACCOUNTING
C 1 DEFINING LIABILITIES
Because of a past event . . .
The company
has a present obligation
. . . For future sacrifices
NOTE GIVEN TO EXTEND
P1
CREDIT PERIOD
On October 30, 2009, Matrix, Inc. pays the note plus interest to Carter.
Interest expense = $5,000 × 12% × (90 ÷ 360) = $150
plus interest at the annual rate of 6% .
Jackson Smith
P1 FACE VALUE EQUALS AMOUNT BORROWED
On September 1, 2009, Jackson Smith borrows $20,000 from American Bank. The note bears interest at 6% per year. Principal and interest
year or the company’s operating cycle, whichever is longer.
NOTE GIVEN TO EXTEND
P1
CREDIT PERIOD
On August 1, 2009, Matrix, Inc. asked Carter, Co. to accept a 90-day, 12% note to replace its
P1
ADJUSTMENT
TO NOTES
On December 16, 2009, James Burrows would make the following entry:
Dec 16
Cash
8,000
Notes payable
To record amount borrowed
from bank
8,000
State and Local Income
Taxes
Amounts withheld depend on the employee’s earnings, tax rates, and number of withholding allowances.
Employers must pay the taxes withheld from employees’ gross pay to the appropriate government agency.
Past
Present
Future
C 1 CLASSIFYING LIABILITIES
Current Liabilities
Long-Term Liabilities
Expected to be paid within one
year or the company’s operating cycle, whichever is longer.
$20,000 Face Value
Sept. 1, 2009 Date
Ninety days after date I promise to pay to the order of
American Bank
Nashville, TN
Twenty thousand and no/100 - - - - - - - - - - - - - - - - - Dollars
On December 31, 2009, the adjustment is:
DR CR
Dec 31 Interest expense
40
Interest payable
40
To accrue interest on note
$8,000 × 12% × (15 ÷ 360) = $40
END-OF-PERIOD
C2
LIABILITIES
Accounts Payable
Sales Taxes Payable
Unearned Revenues
Short-Term Notes Payable
Payroll Liabilities
Multi-Period Known Liabilities
C 2 SALES TAXES PAYABLE
Note Date
End of Period
An adjusting entry is required to record Interest
Expense incurred to date.
Maturity Date
P1
Dec. 16, 2009
END-OF-PERIOD ADJUSTMENT TO NOTES
Percent of Total Liabilities
UNCERTAINTY IN
C1
LIABILITIES
Uncertainty in Whom to Pay
Uncertainty in When to Pay
Uncertainty in How Much to Pay
KNOWN (DETERMINABLE)