Midterm Exam 3 Review - subject to unemployment taxes was...

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1. ABC Company reported the following stockholders’ equity section in its balance sheet on December 31, 2007: Preferred stock, 6%, Cumulative, $50 par, 32,000 shares issued and outstanding $1,600,000 Common stock $5 par, 500,000 shares authorized, 200,000 shares issued 1,000,000 Paid in Capital in excess of par value, Common Stock 900,000 Retained earnings 4,800,000 Less: treasury stock at cost, 25,000 common shares (500,000) TOTAL STOCKHOLDERS’ EQUITY 7,800,000 On January 1, 2008, ABC Company declared a 15% common stock dividend. The market price per share of ABC Company’s common stock on that day was $15 per share. Determine the total Stockholders Equity after the stock dividend showing balances for each item.
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2. $500,000 10 year, 6% Bonds issued at 96.5, with an unamortized discount of $ 7,500 are redeemed at 95. Prepare the journal entry to record the redemption.
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3. Dowling Company had gross wages of $356,000 during the week ended December 6. The amount of wages subject to Social Security Taxes was $285,000 and the amount of wages
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Unformatted text preview: subject to unemployment taxes was $18,000. Employee Federal Income taxes is $ 66,900. The tax rates are as follows: FICA-SS…. .6.2% FICA-Medicare…1.45% SUTA …. . 5.4% FUTA……………0.8% Record the journal entries a. to record the payroll for the week of December 6 b. to record the payroll tax expense incurred for the week of December 6. 4. Selected data from the accounting records of Extravaganza Inc, for the current year ended December 31, are as follows: Bal Jan 1 2007 Bal Dec 31, 2007 Accounts Receivable $17,000 $21,000 Accrued Liabilities (for salaries) 4,300 4,700 Accounts Payable 32,100 35,400 Inventories 59,500 64,700 Prepaid Insurance 2,500 3,000 During the current year, Sales totaled $ 464,000 and the cost of the merchandise sold was $345,000. Operating expenses related to salaries and prepaid insurance other than depreciation expense was $ 60,000. Net Income for the current period was $250,000. Prepare the cash flows from operating activities using the direct method ....
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