I really need help please !!!!!!!!!!!!!
1. Accounting for payroll. Jimmy Paycheck earned $1,500 per month as the manager of a recording studio. Jimmy has 25% of his earning withheld for federal income taxes. There are no other amounts withheld except for those required by the federal government. What are the other amounts that must be deducted from Jimmy’s earnings? Calculate the net amount Jimmy will receive on his next paycheck.
2. Account for warranties. Key Company offers a three-year warranty on its premium door locks. During the year, the company had sales of $100,000. Related to the sales, warranty costs should be approximately $3,000 per year. How much warranty expense related to these sales will Key Company’s income statement show in the year of the sales? How much warranty expense related to these sales will Key Company have in the two years after the sales?
3. Account for mortgages. Nunez Company has arranged to borrow $25,000 for five years at an interest rate of 8%. The annual payments will be $6,261.41. When Nunez makes its first payment at the end of the first year of the loan, how much of the payment will be interest?
1. To account for payroll and calculate the net amount Jimmy will receive on his next paycheck, follow these steps:
- Start with Jimmy's monthly earnings of $1,500.
- Calculate the amount withheld for federal income taxes by multiplying his earnings by the withholding rate: $1,500 * 25% = $375.
- Subtract the federal income tax withholding from his earnings: $1,500 - $375 = $1,125.
In this case, no other amounts are mentioned to be withheld, so the net amount Jimmy will receive on his next paycheck is $1,125.
2. To account for warranties and determine the warranty expense, follow these steps:
- Start with the sales amount of $100,000.
- Determine the annual warranty costs related to these sales, which are stated to be approximately $3,000 per year.
- Since the warranty covers a three-year period, divide the total warranty costs by three to allocate the expense evenly over the three years: $3,000 / 3 = $1,000.
The income statement for the year of the sales will show warranty expense of $1,000. For the two years after the sales, the same amount of $1,000 per year will be recorded as warranty expense.
3. To account for mortgages and calculate the interest portion of the first payment, follow these steps:
- Start with the loan amount of $25,000.
- Determine the loan term of five years and the annual payments of $6,261.41.
- Subtract the principal portion of the payment from the total payment to find the interest portion. Since the first payment is made at the end of the first year, the interest portion is the amount accrued over one year.
To calculate the interest portion, subtract the principal portion from the total payment:
Interest = Total payment - Principal portion
Interest = $6,261.41 - Principal portion
Since the interest rate is given as 8%, you need to calculate the principal portion first using an appropriate formula, such as the amortization formula.