Complete the following payroll ledger. Find the total gross earnings for the employee. Time and a half is paid on all hours over 40 in one week.

Employee	Hours Worked	Reg. Hrs.	O.T. Hrs.	Reg. Rate	Gross Earnings
Bianchi	46.5			$10.80

Use the percentage method of withholding to find federal withholding tax, a $6.2 \%$ FICA rate to find FICA tax, and $1.45 \%$ to find Medicare tax for the employee. Then find the net pay for the employee. The number of withholding allowances and the marital status are listed after the employee's name. Assume that no employee has earned over $\$ 115,000$ so far this year.

Use the percentage method of withholding to find federal withholding tax, a $6.2 \%$ FICA rate to find FICA tax, and $1.45 \%$ to find Medicare tax for the employee. Then find the net pay for the employee. The number of withholding allowances and the marital status are listed after the employee's name. Assume that no employee has earned over $\$ 115,000$ so far this year.

Use the percentage method of withholding to find federal withholding tax, a $6.2 \%$ FICA rate to find FICA tax, and $1.45 \%$ to find Medicare tax for the employee. Then find the net pay for the employee. The number of withholding allowances and the marital status are listed after the employee's name. Assume that no employee has earned over $\$ 115,000$ so far this year.

Use the percentage method of withholding to find federal withholding tax, a $6.2 \%$ FICA rate to find FICA tax, and $1.45 \%$ to find Medicare tax for the employee. Then find the net pay for the employee. The number of withholding allowances and the marital status are listed after the employee's name. Assume that no employee has earned over $\$ 115,000$ so far this year.

Use the percentage method of withholding to find federal withholding tax, a $6.2 \%$ FICA rate to find FICA tax, and $1.45 \%$ to find Medicare tax for the employee. Then find the net pay for the employee. The number of withholding allowances and the marital status are listed after the employee's name. Assume that no employee has earned over $\$ 115,000$ so far this year.

Use the percentage method of withholding to find federal withholding tax, a $6.2 \%$ FICA rate to find FICA tax, and $1.45 \%$ to find Medicare tax for the employee. Then find the net pay for the employee. The number of withholding allowances and the marital status are listed after the employee's name. Assume that no employee has earned over $\$ 115,000$ so far this year.

Use the percentage method of withholding to find federal withholding tax, a $6.2 \%$ FICA rate to find FICA tax, and $1.45 \%$ to find Medicare tax for the employee. Then find the net pay for the employee. The number of withholding allowances and the marital status are listed after the employee's name. Assume that no employee has earned over $\$ 115,000$ so far this year.

Use the percentage method of withholding to find federal withholding tax, a $6.2 \%$ FICA rate to find FICA tax, and $1.45 \%$ to find Medicare tax for the employee. Then find the net pay for the employee. The number of withholding allowances and the marital status are listed after the employee's name. Assume that no employee has earned over $\$ 115,000$ so far this year.

Use the percentage method of withholding to find federal withholding tax, a $6.2 \%$ FICA rate to find FICA tax, and $1.45 \%$ to find Medicare tax for the employee. Then find the net pay for the employee. The number of withholding allowances and the marital status are listed after the employee's name. Assume that no employee has earned over $\$ 115,000$ so far this year.

While the examples in this chapter have focused on a single employer plan, many states operate statewide plans, referred to as Public Employee Retirement Systems (PERS), to which multiple employers contribute. One of the largest PERS plans in the nation is operated in the State of California.

Required

To answer the following questions, use the website of CalPERS. The answers to the questions can be found in CalPERS’s annual report and by using the “about,” “organization,” and “facts at a glance” sections provided on the site.

What types of programs are administered by CalPERS?

During the recent recession, Polydorous Inc. accumulated a deficit in retained earnings. Although still operating at a loss, the company posted better results during 20X1. Polydorous is having trouble paying suppliers on time and is paying interest when it is due. The company files for protection under Chapter 11 of the Bankruptcy Code and has the following liabilities and stockholders' equity accounts at the time the petition is filed:

$$\begin{array}{lr} \text{Accounts Payable} & \$160,000 \\ \text{Interest Payable} & 20,000 \\ \text{Notes Payable, 10\\\%, unsecured} & 340,000 \\ \text{Preferred Stock} & 100,000 \\ \text{Common Stock, \$5 par} & 150,000 \\ \text{Retained Earnings (deficit)} & \underline{(80,000)} \\ \text{Total} & \underline{\underline{\$ 690,000}} \\ \end{array}$$

A plan of reorganization is filed with the court, which approves it after review and obtaining creditor and investor votes. The plan of reorganization includes the following actions:

1. The prepetition accounts payable will be restructured according to the following: (a) $40,000 will be paid in cash, (b)$20,000 will be eliminated, and ( c) the remaining $100,000 will be exchanged for a five-year, secured note payable paying 12 percent interest.

2. The interest payable will be restructured as follows: elimination of$10,000 of the interest and payment of the remaining $10,000 in cash.

3. The 10 percent, unsecured notes payable will be restructured as follows: (a)$60,000 of them will be eliminated; (b) $10,000 of them will be paid in cash; ( c)$240,000 of them will be exchanged for a five-year, 12 percent secured note; and (d) the remaining $30,000 will be exchanged for 3,000 shares of newly issued common stock having a par value of$10.

4. The preferred shareholders will exchange their stock for 5,000 shares of newly issued $10 par common stock.

5. The common shareholders will exchange their stock for 2,000 shares of newly issued$10 par common stock.

After extensive analysis, the company's reorganization value is determined to be $510,000 prior to any payments of cash required by the reorganization plan. An additional$10,000 in current liabilities have been incurred since the petition was filed. After the reorganization is completed, the capital structure of the company will be as follows:

$$\begin{array}{lr} \text{Current liabilities (postpetition)} & \$\hspace{6pt}10,000 \\ \text{Notes payable, 12\\\% secured} & 340,000 \\ \text{Common stock (\$10 par)} & \underline{100,000} \\ \text{Post reorganization capital structure} & \underline{\underline{\$450,000}}\\ \end{array}$$

An evaluation of the assets' fair values was made after the company completed its reorganization, immediately prior to the point the company emerged from the proceedings. The following information is available:

$$\begin{array}{lrr} & \textbf{Book Value} & \textbf{Fair Value} \\ \\ \text{Cash} & \$\hspace{6pt}30,000 & \$\hspace{6pt}30,000 \\ \text{Accounts receivable (net)} & 140,000 & 110,000 \\ \text{Inventory} & 25,000 & 18,000 \\ \text{Property, plant \& equipment (net)} & \underline{445,000} & \underline{262,000} \\ \text{Total} & \underline{\underline{\$640,000}} & \underline{\underline{\$420,000}} \\ \end{array}$$

Required

Prepare a plan of reorganization recovery analysis for the liability and stockholders' equity accounts of Polydorous Inc. on the day the plan of reorganization is approved. (Hint: The liabilities on the plan's approval day are $530,000, which is$520,000 from prepetition payables plus $10,000 in additional accounts payable incurred post petition.)

One way to lower the market price of a firm’s stock is via a stock split. Rock-O Corporation finds itself in a different situation: Its stock has been selling at relatively low prices. To increase the market price of the stock, the company chooses to use a reverse stock split of 2-for-3. The company currently has 700,000 common shares outstanding and no preferred stock. The common stock carries a par value of $1. At this time, the paid-in capital in excess of par is$7,000,000, and the firm’s retained earnings are $3,500,000.

TO DO Create a spreadsheet to determine the following:

b. The stockholders’ equity section of the balance sheet after the reverse stock split.

In what ways preferred stock like long-term debt? In what ways is it like common stock?