Partner investments were recorded with a journal entry showing Levy contributed $30,000 cash and $80,000 land, while Parcells contributed $50,000 cash and $20,000 equipment. Brookhaven Publishing recorded a $50,000 salary expense in February with journal entries to deduct payroll taxes, income tax withholdings, and record the company's payroll tax expenses. Visconti's recorded several short-term borrowing and liability transactions in December with journal entries, including notes payable, wages accrual, and warranty liability.

1. ACC 205 Week 4 Exercise
Assignment Liability - New
buy here
http://finishedexams.com/homework_tex
t.php?cat=1777
www.finishedexams.com
Immediate access to
solutions
for ENTIRE COURSES,
FINAL EXAMS and
HOMEWORKS “RATED A+"
- Without Registration!

2. ACC 205 Week 4 Exercise Assignment Liability - New
Partner investments; journal entries. The LP partnership was formed on January
1, 19X7, by investments from Bill Levy and Marv Parcells. Levy contributed
$30,000 cash and $80,000 of land. Parcells contributed cash of $50,000 and
equipment with a value of $20,000.
a. Prepare the journal entries needed to record the investments of Levy and
Parcells.
2. Payroll accounting. Assume that the following tax rates and payroll
information pertain to Brookhaven Publishing:
· Social Security taxes: 6% on the first $55,000 earned
· Medicare taxes: 1.5% on the first $130,000 earned
· Federal income taxes withheld from wages: $7,500
· State income taxes: 5% of gross earnings
· Insurance withholdings: 1% of gross earnings
· State unemployment taxes: 5.4% on the first $7,000 earned
· Federal unemployment taxes: 0.8% on the first $7,000 earned
The company incurred a salary expense of $50,000 during February. All employees
had earned less than $5,000 by month-end.
a. Prepare the necessary entry to record Brookhaven’s February payroll. The
entry will include deductions for the following:
· Social Security taxes
· Medicare taxes
· Federal income taxes withheld
· State income taxes
· Insurance withholdings
b. Prepare the journal entry to record Brookhaven’s payroll tax expense. The
entry will include the following:
· Matching Social Security taxes
· Matching Medicare taxes
· State unemployment taxes
· Federal unemployment taxes
3. Current liabilities: entries and disclosure. A review of selected financial
activities of Visconti’s during 20XX disclosed the following:
12/1
Borrowed $20,000 from the First City Bank by signing a 3- month, 15% note
payable. Interest and principal are due at maturity.
2/10
Established a warranty liability for the XY-80, a new product. Sales are
expected to total 1,000 units during the month. Past experience with similar
products indicates that 2% of the units will require repair, with warranty costs
averaging $27 per unit.
12/22
Purchased $16,000 of merchandise on account from Oregon Company, terms 2/10,
n/30.
12/26
Borrowed $5,000 from First City Bank; signed a note payable due in 60 days.
12/31
Repaired six XY-80s during the month at a total cost of $162.
12/31
Accrued 3 days of salaries at a total cost of $1,400.
Instructions
a. Prepare journal entries to record the transactions.
b. Prepare adjusting entries on October 31 to record accrued interest.
c. Prepare the Current Liability section of Red Bank’s balance sheet as of
October 31. Assume that the Accounts Payable account totals $203,600 on this
date.

3. 4. Issuance of stock: organization costs. Snowbound Corporation was incorporated
in July. The firm’s charter authorized the sale of 200,000 shares of $10 par-
value common stock. The following transactions occurred during the year:
7/1:
Sold 45,000 shares of common stock to investors for $18 per share. Cash was
collected and the shares were issued.
8/11
Sold 20,000 shares to investors for $22 per share. Cash was collected and the
shares were issued.
9/1 Declared a cash dividend on 9/1 for $1.00 a share for shareholders on
record 10/1 with payment being made on 11/1.
Instructions
a. Prepare journal entries for the two stock issues.
b. Prepare journal entries for the cash dividend declaration and payment.
5. Notes payable. Red Bank Enterprises was involved in the following
transactions during the fiscal year ending October 31:
8/2:
Borrowed $75,000 from the Bank of Kingsville by signing a 120-day note.
8/20:
Issued a $40,000 note to Harris Motors for the purchase of a $40,000 delivery
truck. The note is due in 180 days and carries a 12% interest rate.
9/10:
Purchased merchandise from Pans Enterprises in the amount of $15,000. Issued a
30-day, 12% note in settlement of the balance owed.
9/11:
Issued a $60,000 note to Datatex Equipment in settlement of an overdue account
payable of the same amount. The note is due in 30 days and carries a 14%
interest rate.
10/10:
The note to Pans Enterprises was paid in full.
10/31: The note to Datatex Equipment was paid in full.
11/30: Paid note to Bank of Kingville
Instructions
a. Prepare journal entries to record the transactions.
b. Prepare adjusting entries on October 31 to record accrued interest.
c. Prepare the Current Liability section of Red Bank’s balance sheet as of
October 31. Assume that the Accounts Payable account totals $203,600 on this
date.