Altria Group, Inc., has over 12 pages dedicated to describing contingent liabilities in the notes to recent financial statements. These pages include extensive descriptions of multiple contingent liabilities. Use the Internet to research Altria Group, Inc., at http://www.altria.com.

a. What are the major business units of Altria Group?

The following accounts, with the balances indicated, appear in the ledger of Garcon Co. on December 1 of the current year:

For each of the following payroll-related taxes, indicate whether they are generally apply to both employees and employer:

1. Federal income tax
2. Medicare tax
3. Social security tax
4. Federal unemployment compensation tax
5. State unemployment compensation tax

A business issued a 30-day, 7% note for $150,000 to a creditor on account. Journalize the entries to record (b) the payment of the note at maturity, including interest.

The payroll register of Longboat Co. indicates $5,400 of social security withheld and$1,350 of Medicare tax withheld on total salaries of $90,000 for the period. Retirement savings withheld from employee paychecks were$5,400 for the period. Federal withholding for the period totaled $17,820.

Provide the journal entry for the period’s payroll.

For each of the following payroll-related taxes, indicate whether they are generally apply to (b) employers only:

1. Federal income tax
2. Medicare tax
3. Social security tax
4. Federal unemployment compensation tax
5. State unemployment compensation tax

The payroll register of Konrath Co. indicates $13,200 of social security withheld and$3,300 of Medicare tax withheld on total salaries of $220,000 for the period. Federal withholding for the period totaled$43,560.

Provide the journal entry for the period’s payroll.

For each of the following payroll-related taxes, indicate whether they are generally apply to (a) employees only:

1. Federal income tax
2. Medicare tax
3. Social security tax
4. Federal unemployment compensation tax
5. State unemployment compensation tax

A business issued a 30-day, 7% note for $150,000 to a creditor on account. Journalize the entries to record (a) the issuance of the note.

Payroll accounting involves the use of government-supplied forms to account for payroll taxes. Three common forms are the W-2, Form 940, and Form 941. Form a team with three of your classmates and retrieve copies of each of these forms. They may be obtained from a local IRS office, a library, or downloaded from the Internet at http://www.irs.gov (go to forms and publications).

Briefly describe the purpose of each of the three forms.

The following data for Flexco Inc. relate to the payroll for the week ended December 7, 2014:

$$\begin{array}{lcrrrr} & \textbf{Hours} & \textbf{Hourly} & \textbf{Weekly} & \textbf{Federal} & \textbf{U.S. Savings}\\ \textbf{Employee} & \textbf{Worked} & \textbf{Rate} & \textbf{Salary}& \textbf{Income Tax} & \textbf{Bonds}\\ \\ \text{Carlton} & 52 & \$50.00 && \$667.00 & \$\hspace{5pt} 60\\ \text{Grove} &&& \$4,000 & 860.00 & 100\\ \text{Johnson} & 36 & 52.00&& 355.68 & 0\\ \text{Koufax} & 45& 58.00 &&578.55& 44\\ \text{Maddux} & 37& 45.00&& 349.65 &62\\ \text{Seaver} &&& 3,200& 768.00& 120\\ \text{Spahn} & 46& 52.00&& 382.20& 0\\ \text{Winn} & 48& 50.00&& 572.00& 75\\ \text{Young} & 43& 54.00&& 480.60& 80\\ \end{array}$$

Employees Grove and Seaver are office staff, and all of the other employees are sales personnel. All sales personnel are paid 1.5 times the regular rate for all hours in excess of 40 hours per week. The social security tax rate is 6.0% of each employee’s annual earnings, and Medicare tax is 1.5% of each employee’s annual earnings. The next payroll check to be used is No. 328.

Instructions

1. Prepare a payroll register for Flexco Inc. for the week ended December 7, 2014. Use the following columns for the payroll register: Employee, Total Hours, Regular Earnings, Overtime Earnings, Total Earnings, Social Security Tax, Medicare Tax, Federal Income Tax, U.S. Savings Bonds, Total Deductions, Net Pay, Ck. No., Sales Salaries Expense, and Office Salaries Expense.

2. Journalize the entry to record the payroll for the week.

The following data for Throwback Industries Inc. relate to the payroll for the week ended December 7, 2014:

$$\begin{array}{lcrrrr} & \textbf{Hours} & \textbf{Hourly} & \textbf{Weekly} & \textbf{Federal} & \textbf{U.S. Savings}\\ \textbf{Employee} & \textbf{Worked} & \textbf{Rate} & \textbf{Salary}& \textbf{Income Tax} & \textbf{Bonds}\\ \\ \text{Aaron} & 46 & \$68.00&& \$766.36 & \$100\\ \text{Cobb} & 41 &62.00&& 553.20 &110\\ \text{Clemente} & 48 & 70.00 && 691.60 & 120\\ \text{DiMaggio} & 35 &56.00 &&411.60& 0\\ \text{Griffey, Jr.} & 45 &62.00&& 618.45 &130\\ \text{Mantle} &&& \$1,800 & 432.00 &120\\ \text{Robinson} & 36 & 54.00 && 291.60& 130\\ \text{Williams} &&& 2,000 & 440.00 &125\\ \text{Vaughn} & 42& 62.00&& 533.20 &50\\ \end{array}$$

Employees Mantle and Williams are office staff, and all of the other employees are sales personnel. All sales personnel are paid 1.5 times the regular rate for all hours in excess of 40 hours per week. The social security tax rate is 6.0%, and Medicare tax is 1.5% of each employee’s annual earnings. The next payroll check to be used is No. 901.

Instructions

1. Prepare a payroll register for Throwback Industries Inc. for the week ended December 7, 2014. Use the following columns for the payroll register: Employee, Total Hours, Regular Earnings, Overtime Earnings, Total Earnings, Social Security Tax, Medicare Tax, Federal Income Tax, U.S. Savings Bonds, Total Deductions, Net Pay, Ck. No., Sales Salaries Expense, and Office Salaries Expense.

2. Journalize the entry to record the payroll for the week.

A borrower has two alternatives for a loan: (1) issue a $240,000, 60-day, 8% note or (2) issue a$240,000, 60-day note that the creditor discounts at 8%.

c. Which alternative is more favorable to the borrower? Explain.

A borrower has two alternatives for a loan: (1) issue a $240,000, 60-day, 8% note or (2) issue a$240,000, 60-day note that the creditor discounts at 8%.

b. Determine the proceeds received by the borrower in each situation.