new for 20131.Partner investments; journal entries.The LP partnership was formed on January 1 19X7 by investments from Bill Levy and Marv Parcells. Levy contributed $30000 cash and $80000 of land. Parcells contributed cash of $50000 and equipment with a value of $20000.a. Prepare the journal entries needed to record the investments of Levy and Parcells.2. Payroll accounting. Assume that the following tax rates and payroll information pertain to Brookhaven Publishing: Social Security taxes: 6% on the first $55000 earned Medicare taxes: 1.5% on the first $130000 earned Federal income taxes withheld from wages: $7500 State income taxes: 5% of gross earnings Insurance withholdings: 1% of gross earnings State unemployment taxes: 5.4% on the first $7000 earned Federal unemployment taxes: 0.8% on the first $7000 earnedThe company incurred a salary expense of $50000 during February. All employees had earned less than $5000 by month-end.a. Prepare the necessary entry to record Brookhaven s February payroll. The entry will include deductions for the following: Social Security taxes Medicare taxes Federal income taxes withheld State income taxes Insurance withholdings3. Current liabilities: entries and disclosure.A review of selected financial activities of Visconti s during 20XX disclosed the following:12/1Borrowed $20000 from the First City Bank by signing a 3- month 15% note payable. Interest and principal are due at maturity.2/10Established a warranty liability for the XY-80 a new product. Sales are expected to total 1000 units during the month. Past experience with similar products indicates that 2% of the units will require repair with warranty costs averaging $27 per unit.12/22Purchased $16000 of merchandise on account from Oregon Company terms 2/10 n/30.12/26Borrowed $5000 from First City Bank; signed a note payable due in 60 days.12/31Repaired six XY-80s during the month at a total cost of $162.12/31Accrued 3 days of salaries at a total cost of $1400.Instructionsa. Prepare journal entries to record the transactions.4. Issuance of stock: organization costs.Snowbound Corporation was incorporated in July. The firm s charter authorized the sale of 200000 shares of $10 par-value common stock. The following transactions occurred during the year:7/1:Sold 45000 shares of common stock to investors for $18 per share. Cash was collected and the shares were issued.8/11Sold 20000 shares to investors for $22 per share. Cash was collected and the shares were issued.9/1 Declared a cash dividend on 9/1 for $1.00 a share for shareholders on record 10/1 with payment being made on 11/1.Instructionsa.Prepare journal entries for the two stock issues.5. Notes payable. Red Bank Enterprises was involved in the following transactions during the fiscal year ending October 31:8/2:Borrowed $75000 from the Bank of Kingsville by signing a 120-day note.8/20:Issued a $40000 note to Harris Motors for the purchase of a $40000 de livery truck. The note is due in 180 days and carries a 12% interest rate.9/10:Purchased merchandise from Pans Enterprises in the amount of $15000. Issued a 30-day 12% note in settlement of the balance owed.9/11:Issued a $60000 note to Datatex Equipment in settlement of an overdue account payable of the same amount. The note is due in 30 days and car ries a 14% interest rate.10/10:The note to Pans Enterprises was paid in full.10/31: The note to Datatex Equipment was paid in full.11/30: Paid note to Bank of KingvilleInstructionsa. Prepare journal entries to record the transactions.b. Prepare adjusting entries on October 31 to record accrued interest.c. Prepare the Current Liability section of Red Bank s balance sheet as of October 31. Assume that the Accounts Payable account totals $203600 on this date.
