Art Panache Is the Sole Employee of Panache Sales

question 46

True/False

Art Panache is the sole employee of Panache Sales. His employer pays a portion of his health insurance premium, and also contributes to a retirement plan in his name. The company's share of the health insurance premium is $600, and the company's contribution to the retirement plan is $780. The journal entry in the payroll cycle to record the employee benefits to be paid by the company should include a debit to Employee Health Insurance Payable for $1,380.

Differentiate between various methods of depreciation, the reasons for their use, and their impact on financial statements.

Understand and calculate depreciation expenses using different depreciation methods (inventory system, straight-line, sum-of-the-years'-digits, double-declining-balance).

Explain the rationale behind selecting certain depreciation methods and their impact on financial statements.

Compute the depreciation expense of assets bought at different times within a year using various conventions (nearest whole month, nearest whole year, half-year).

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, derived from the company's profits.

Excess Solvency

refers to the situation where a company holds significantly more assets or financial reserves than the minimum required by regulators to cover its liabilities and potential claims.

Proxy

A form of authorization given by a shareholder or other party allowing another person to vote or act on their behalf, often used in corporate settings.

Corporate Matters

Issues or affairs related to the governance, management, and regulatory compliance of corporations.