Chapter 13 In-Class Problems 1. TRUCK Company purchased a truck for $20,000 on April 1, 2010.

They expect the truck to last 10 years and to have a salvage value of $1,000. a. Assume they purchased the truck with a 12-month 10% note. What would be the necessary journal entries on the following dates? April 1, 2010:

December 31, 2010:

March 31, 2011:

b. Assume they purchased the truck with a 12-month zero-interest bearing $23,000 note. What would be the necessary journal entries on the following dates? April 1, 2010:

December 31, 2010:

March 31, 2011:

2. BNC Company pays $100,000 in wages. Assume that normal FICA rates apply to these wages, and that $20,000 is for employee wages in excess of $106,800. The following withholding rates apply: Federal income tax: 10% State income tax: 2% a. What would be the correct journal entry for the wage expense?

b. What would be the correct journal entry for the payroll tax expense?

3. Meow Cat Company has a program where you can turn in labels from cans of their cat food for a cat toy. Customers must turn in 5 labels and include a check or money order for $1 to receive a cat toy. Meow Cat purchased 12,000 cat toys for $18,000. In 2010, Meow Cat sold 200,000 cans of cat food. They estimate that 25% of the labels will eventually be turned in for the toys. During 2010, 2,000 toys were redeemed. What are the necessary journal entries to record these transactions?

4. E13-15 (#2): In packages of its products, Wiseman, Inc. includes coupons that may be presented at retail stores to obtain discounts on other Wiseman products. Retailers are reimbursed for the face amount of coupons redeemed plus 10% of that amount for handling costs. Wiseman honors requests for coupon redemption by retailers for up to 3 months after the consumer expiration date. Wiseman estimates that 60% of all coupons issues will ultimately be redeemed. Information relating to coupons issued by Wiseman during 2012 is as follows: Consumer expiration date: 12/31/12 Total face amount of coupons issued: $850,000 Total payments to retailers as of 12/31/12: $330,000 What amount should Wiseman report as a liability for unredeemed coupons at December 31, 2012?