Accounting Answers

Differentiate between revenue recognition and prudence?

Explain difference between revenue expenditure and capital expenditure with suitable example?

On 1 August 2016 Sipho started a garden services business. The following is an extract of certain

accounts from his trial balance on 31 August 2016:

Prepaid expenses (insurance) R1500

Equipment R8000

Loan (credit) R10000

Fees earned R2000

Income received in advance (fees) R1500

The following relates to the above accounts:

a. The insurance premium was paid for the month of September 2016.

b. Depreciation on equipment for August 2016 amounts to R300.

c. The loan was negotiated on 1 August 2016 at an interest rate of 15% per annum.

d. A client paid R1500 on 1 August 2016, for the next four months (September, October,

November and December).

e. A client, who received services valued at R250 during August, has not yet paid for them.

Sipho would like to prepare statements on a monthly basis.

REQUIRED:

Prepare the adjusting general journal entries as at 31 August 2016. Show all calculations.

dentify the line item that does not appear on a Statement of Financial Position.

Evaluate the introduction of the payments to support households and income during

the COVID-19 crisis from the perspective of substantive and procedural

judgements of fairness.

Complete Part 2 of Form 940 based on the following information: (Round your answers to two decimal places, if necessary.) Total payroll for the year $913,590.

Payroll to employees in excess of $7,000 $421,930.

Employer contributions into employees' 401(k) plans $23,710 Part 2: Determine your FUTA tax before adjustments. If any line does NOT apply, leave it blank.

Retirement/Pension

Subtotal $445,640.

Total taxable FUTA wages $467,950.

FUTA tax before adjustments $2,807.70.

If the employer is located in California, which has a credit reduction of 2.1%, what would be the amount of the credit reduction?

Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages.

Hunter Company had a FUTA taxable payroll of $192,700 for the year. Since the company is located in a state that has 1.5% FUTA credit reduction due to unpaid loans, determine Hunter's FUTA tax liability for the year.

a. Complete Part 2 of Form 940 based on the following information: (Round your answers to two decimal places, if necessary.)

Total payroll for the year $913,590

Payroll to employees in excess of $7,000 $421,930

Employer contributions into employees' 401(k) plans $23,710

Part 2: Determine your FUTA tax before adjustments. If any line does NOT apply, leave it blank.

Retirement/Pension

Subtotal $445,640

Total taxable FUTA wages $467,950

FUTA tax before adjustments $2,807.70

If the employer is located in California, which has a credit reduction of 2.1%, what would be the amount of the credit reduction?

Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages. Faruga Company had FUTA taxable payrolls for the four quarters of $38,400; $29,600; $16,500; and $8,900, respectively. What was the amount of Faruga’s first required deposit of FUTA taxes?

In Part 5 of Form 940, Peterson Company reported FUTA tax liabilities as follows:


First quarter: $397.50


Second quarter: $209.10


Third quarter: $274.50


Fourth quarter: $262.20


List the amounts and the dates of each required FUTA tax deposit:


1st quarter dates 4/05, 4/15, or 4/30


2nd quarter dates 7/05, 7/15, or 7/31


3rd quarter dates 10/05, 10/15, or 10/31


4th quarter dates 1/05, 1/15, or 1/31

3. Band Ltd issued debentures with a face value of N$1 000, which mature in exactly five years from today’s date. The latest interest payment has just been received. The interest is payable at 10% per annum on the face value of the debentures, on a quarterly basis. The market yield for the debentures is quoted as 12% per annum.


The value of a Band Ltd debenture is:


a) N$939

b) N$993

c) N$1 076

d) N$1 000