Reference no: EM132937912

Question -

Part 1 - Oates Company's payroll for the week ending January 15 amounted to $95,000 for Office Salaries and $150,000 for Store Wages. None of the employees has reached the earnings limits specified for federal or state employer payroll taxes. The following deductions were withheld from employees' salaries and wages:

Federal Income Tax $50,000

State Income Tax 9,000

FICA Taxes 19,600

Union Dues 2,700

United Fund 1,800

Federal unemployment tax (FUTA) rate is 6.2% less a credit equal to the rate paid for state unemployment taxes. The state unemployment tax (SUTA) rate is 5.4%.

Prepare (a) the journal entry to record the weekly payroll ending January 15 and (b) also the employer's payroll tax expense on the payroll.

Part 2 - On January 1, 2019, the Ramirez Company ledger shows Equipment $29,000 and Accumulated Depreciation $9,000. The depreciation resulted from using the straight line method with a useful life of 10 years and salvage value of $2,000. On this date, the company concludes that the equipment has a remaining useful life of only 4 years with the same salvage value. Compute the revised annual depreciation.

Part 3 - Hanna Company borrows $80,000 on July 1 from the bank by signing an $80,000, 10% one year note payable.

(a) Prepare the journal entry to record the proceeds of the note.

(b) Prepare the journal entry to record accrued interest at December 31, assuming adjusting entries are made only at the end of the year.