Question

 An employee earns $30 per hour and 1.5 times that rate for all hours in excess of 40 hours per week. If the employee worked 54 hours during the Assume that the social security tax rate is 6.0%, the Medicare tax rate is 1.5%, and the employee's federal income tax withheld is $295.

 a. Determine the employee's gross pay for the week.

 b. Determine the employee's net pay for the week. Round your answer to two decimal places.

 Liability Transactions

 The following items were selected from among the transactions completed by Aston Martin Inc. during the current year:

 Apr. 15. Borrowed $225,000 from Audi Company, issuing a 30-day, 6% note for that amount.

 May 1. Purchased equipment by issuing a $320,000, 180-day note to Spyder Manufacturing Co., which discounted the note at the rate of 6%.

 15. Paid Audi Company the interest due on the note of April 15 and renewed the loan by issuing a new 60-day, 8% note for $225,000. (Record both the debit and credit to the notes payable account.)

 July 14. Paid Audi Company the amount due on the note of May 15.

 Aug. 16. Purchased merchandise on account from Exige Co., $90,000, terms, n/30.

 Sept. 15. Issued a 45-day, 6% note for $90,000 to Exige Co., on account.

 Oct. 28. Paid Spyder Manufacturing Co. the amount due on the note of May 1.

 30. Paid Exige Co. the amount owed on the note of September 15.

 Nov. 16. Purchased store equipment from Gallardo Co. for $450,000, paying $50,000 and issuing a series of twenty 9% notes for $20,000 each, coming due at 30-day intervals.

 Dec. 16. Paid the amount due Gallardo Co, on the first note in the series issued on November 16.

 28. Settled a personal injury lawsuit with a customer for $87,500, to be paid in January. Aston Martin Inc, accrued the loss in a litigation claims payable account.

 Required:

 For a compound transaction, accounts should be listed largest to smallest.

 1. Journalize the transactions. If an amount box does not require an entry, leave it blank. Assume a 360-day year.

 2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year:

 a. Product warranty cost, $26,800.

 b. Interest on the 19 remaining notes owed to Gallardo Co.

 If an amount box does not require an entry, leave it blank.

Answer 1