ACC225 Liability Case Due: 7PM EST on February 16, 2021 Note: Consider each part of the homework as separate and distinct problems. Part A Martin Manufacturing has six employees who were paid the following wages during 2020:Employee Annual Wages for 2020Beth Smith $35,000Yu Zhang $175,000Mohammad Nessman $175,000Mark Bruno $80,000Jeff Sparta $75,000Helena Marx $150,000The state unemployment tax is 5.4% The federal unemployed rate is 0.6%. The maximum unemployment wages per employee are $7,000 for both the state and the federal government. Income tax is withheld at the rate of 22% for all employees who have annual wages over $50,000. If wages are under $50,000, the withholding rate is 15%. Martin Manufacturing is in a state that does not impose income taxes. Social security is imposed on both the employer and employee at the rate of 6.2% on the first $137,700 of wages. Medicare tax is imposed on both the employer and the employee at the rate of 1.45% on total wages. Required:1. Calculate the amount of payroll taxes paid by the employer, Martin Manufacturing 2. Prepare the journal entry to record the payment of the payroll. 3. Prepare the journal entry to record the payroll tax expense at 12/31/2020, assuming thepayroll taxes will be paid in 2021. SEE NEXT PAGEPart B Fantasy Company sells video gaming consoles with a 3-year assurance-type warranty. In the past, Fantasy Company has found that in the year in the year of sale, warranty costs have been 1% of sales, in the year after sale warranty costs have been 3% of sales and in the final year of the warranty period the warranty costs have been 8% of sales. The following sales data is available: 2020 = $750,000, 2021 = $800,000; 2022 = $600,000. Warranty expenditures were $6,000, $70,000 and $80,000 in 2020, 2021 and 2022, respectively. Required:1. Prepare journal entries to record the accrual of warranty expense and the payment of warranty expenditures for 2020, 2021 and 2022.2. What amount would Fantasy Company report as a liability on its December 31, 2022 balance sheet if the balance of the warranty liability was $10,000 on December 31, 2019.Part C Maxwell Corporation completed a bond issuance in 2021 to raise cash in anticipation of building a new factory sometime in the near future. The 1st bond issuance occurred on January 1, 2021, when Maxwell issued $3,000,000 of 10%, 10-year bonds when the market rate of interest for similar bonds was 8%. Interest is paid semiannually on June 30th and December 31st. Maxwell uses the effective interest method to amortize the bond premiums and discounts. On December 31, 2024, the ½ of the bonds were retired by Maxwell after the 12/31/24 interest payment by purchasing them on the open market at a price of $1,600,000. Required:1. Calculate the issue price of the bonds on January 1, 2021. 2. Prepare an amortization table for the life of the bonds. 3. Prepare the journal entry to record the issuance of the bonds on January 1, 2021. 4. Prepare the journal entries for the payment of interest on June 30, 2021 and December31, 2021. 5. Prepare the journal entry for the partial retirement of the bonds on December 31, 2024. for more information on The Federal Unemployed Rate check on this:https://en.wikipedia.org/wiki/Unemployment_in_the_United_States
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