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The College Credit Card Services has a significant increase in business each spring due to a large increase in new applicants from graduating college students. Subsequently, each spring 40 temporary workers are hired for a 12-week period, working 40 hours per week at $10 per hour and then they are laid off. College's permanent employment total is 350 workers. Because of these yearly layoffs, College's state unemployment merit tax rate is 9%. If the number of layoffs could be reduced, the merit tax rate could be reduced to 4.1%. As the payroll specialist for College, you have been asked to evaluate the following and determine the pros/cons of each decision:a. Should College stop hiring temporary employees and ask its full-time workers to work overtime to handle the extra load?b. Should College get its temporary employees from a temporary employment agency and therefore not be subject to the extra taxes?
On July 31, 2013, the company paid a two-year premium of $18,000 on an insurance policy that is effective June 1, 2013, and expires May 31, 2015.
Assuming that Reed uses the perpetual inventory method, record the necessary journal entries on June 24 and June 30. The cost of merchandise to Reed Company is 60% of its selling price.
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