Author: Anonymous

A company’s income before interest expense and income taxes is $350,000 and its interest expense is $100,000. Its times interest earned ratio is:

A company received cash proceeds of $206,948 on a bond issue with a par value of $200,000. The difference between par value and issue price for this bond is recorded as a:

A discount on bonds payable:

The debt-to-equity ratio is calculated by dividing total stockholders’ equity by total liabilities.

Decision makers and other users of financial statements are especially interested in evaluating a company’s ability to use its assets in generating sales.

On January 1, Year 1, Stratton Company borrowed $100,000 on a 10-year, 7% installment note payable. The terms of the note require Stratton to pay 10 equal payments of $14,238 each December 31 for 10 years. The required general journal entry to record the payment on the note on December 31, Year 2 is:

Depreciation expense is calculated using its cost, estimates of an asset’s salvage value, and an estimated useful life.

Revenue expenditures:

The debt-to-equity ratio is calculated by dividing total stockholders’ equity by total liabilities.

Gary Marks is paid on a monthly basis. For the month of January of the current year, he earned a total of $8,288. FICA tax for Social Security is 6.2% on the first $118,500 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings. The FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee’s pay. The amount of Federal Income Tax withheld from his earnings was $1,375.17. What is the amount of the employer’s payroll taxes expenses for this employee? (Round your intermediate calculations to two decimal places.)