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To capitalize an expenditure is to:

Natural resources are assets that include standing timber, mineral deposits, and oil and gas fields.

All of the following statements regarding liabilities are true except:

Edmond reported average total assets of $9,965 million and net sales of $10,430 million. Its total asset turnover equals .96.

The effective interest amortization method:

A company borrows $40,000 and issues a 3-year, 10% installment note with interest payable annually. The factor for the present value of an annuity at 10% for 3 years is 2.4869. The factor for the present value of a single sum at 10% for 3 years is 0.7513. The amount of the annual payment is $12,000.

A discount reduces the interest expense of a bond over its life.

An employee earned $128,500 working for an employer in the current year. The current rate for FICA Social Security is 6.2% payable on earnings up to $118,500 maximum per year and the rate for FICA Medicare 1.45% of all earnings. The employer’s total FICA payroll tax for this employee is:

Payments on installment notes normally include accrued interest plus a portion of the principal amount borrowed.

During August, Boxer Company sells $356,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 5% of the selling price. The warranty liability account has a credit balance of $12,800 before adjustment. Customers returned merchandise for warranty repairs during the month that used $9,400 in parts for repairs. The entry to record the estimated warranty expense for the month is: