“Everything Slowly Falling Apart… Just Like All of Us”
This asset class includes buildings and machinery but excludes intangible rights such as patents.
What are plant assets?
The method that estimates uncollectible accounts by applying a percentage to total receivables is called this.
What is the percent of receivables method?
The two FICA components withheld from employee wages are these.
What are Social Security and Medicare?
A written promise to pay a specified sum at a future date, often used to replace an overdue account receivable.
What is a promissory note (note receivable or note payable depending on the party)?
Most companies now allow Credit Cards for many reasons - this is a negative of allowing CC's to be accepted.
What is fees and interest the company has to pay to the bank.
Liabilities that do not have a fixed due date are reported as this.
What are current liabilities?
Under the allowance method, writing off a specific customer account has this effect on Allowance for Doubtful Accounts.
What is ADA must be decreased? (Think no longer an Allowance - it actually is)
Employers must pay unemployment taxes at both federal and state levels; these are commonly abbreviated as these two acronyms.
What are FUTA and SUTA? Remember - employees do not pay FUTA OR SUTA!!!!
Interest on a $7,500 note at 6% for 90 days using a 360‑day year accrues this amount.
What is $112.50?
The accounting term for allocating the cost of a natural resource such as a mine as it is extracted is this.
What is depletion?
Straight-line depreciation for an asset costing $22,000 with a $2,000 salvage over 4 years yields this annual expense.
What is $5,000?
A schedule that groups receivables by how long they are past due to estimate uncollectibles is called this.
What is an aging of accounts receivable?
An employee earns $4,200 in a pay period. Calculate the Social Security and Medicare withholdings at 6.2% and 1.45%, respectively.
What are $260.40 (Social Security) and $60.90 (Medicare)?
CeDees Donuts Disappear estimates that warranty expense will be 6% of sales. Their current sales are $100,000 so this the entry needed.
Credit - Estimated Warranty Liability - $6,000
If equipment cost $100,000 with $45,000 accumulated depreciation and is sold for $60,000 cash, the company records this result.
What is a gain of $5,000.
Under units‑of‑production, depreciation is based on this company estimate rather than time.
What is estimated total production (or usage) over the asset’s life?
If receivables total $90,000 and 4% are estimated uncollectible, and the allowance already has a $800 credit, this is the bad‑debt expense adjustment required.
What is $3,600?
These are the 4 payroll tax expenses employers must pay for each employee.
What are FICA - SS and Medicare, FUTA, and SUTA
A 90‑day, 6% $15,000 note signed on December 1 requires this amount of interest to be accrued at December 31 (360‑day year).
What is $75?
Depreciation is for allocating costs for ________assets while Amortization is for allocating costs for ____________ assets
What is tangible and intangible assets
When a machine costing $118,800 incurs $2,000 freight and $10,000 installation costs but suffers $1,300 installation damage, this is the amount capitalized as the machine’s cost.
What is $130,800?
A company’s aging schedule indicates $18,200 of receivables are likely uncollectible. Before adjustment, the Allowance for Doubtful Accounts shows a $500 debit. What amount of Bad Debts Expense must be recorded to bring the allowance to the required balance?
What is $18,700
An employee has earned $6,500 already this year. If they earned $700 this past week, the employer must pay a percentage of FUTA and SUTA tax on this amount.
What is $500 ($7,000 - $6,500)
When a note matures and the holder receives principal ($500) plus interest ($50), the journal entry to record the receipt includes these three components.
Debit Cash $550
Credit NR $500
Credit Interest Revenue $50
Utah Burger Hut (while out of supplies currently from last week) estimate that $10,000 of the AR balance would be uncollectible. Prior to any year end adjustments the ADA has a debit balance of $1,000. This is the adjusting entry needed for current year.
Debit - Bad Debts Expense - $11,000
Credit - ADA - $11,000
(ADA is a credit balance, if it has debit balance from prior year, we wrote off more than predicted)