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Exam 10: Current Liabilities and Payroll

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Question 51

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Which statement below is not a determinate in calculating the amount of federal income taxes withheld from an individuals pay?

A) filing status
B) types of earnings
C) gross pay
D) number of exemptions

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Question 52

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Journalize the following transactions for Riley Corporation:

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Question 53

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Medicare taxes are withheld from an employee's pay only until the employee has earned a specific amount each year.

Grayson Bank agrees to lend the Trust Company $120,000 on January 1. Trust Company signs a $120,000, 8%, 9-month note. The entry made by Trust Company on January 1 to record the proceeds and issuance of the note is:

The following information is for employee Ella Dodd for the week ended March 15. Total hours worked: 48 Rate: $15 per hour, with double time for all hours in excess of 40 Federal income tax withheld: $200 United Fund deduction: $50 Cumulative earnings prior to current week: $6,400 Tax rates: Social security: 6% on maximum earnings of $100,000. Medicare tax: 1.5% on all earnings. State unemployment: 3.4% on maximum earnings of $7,000; on employer Federal unemployment: 0.8% on maximum earnings of $7,000; on employer

The amount of money a borrower receives from the lender is called discount rate.

Prior to the last weekly payroll period of the calendar year, the cumulative earnings of employees A and B are $99,350 and $91,000 respectively. Their earnings for the last completed payroll period of the year are $850 each. The maximum amount of earnings subject to social security tax at 6% is $100,000. All earnings are subject to Medicare tax of 1.5%. Assuming that the payroll will be paid on December 29, what will be the employer's total FICA tax for this payroll period on the two salary amounts of $850 each?

Interest expense is reported in the operating expense section of the income statement.

Payroll entries are made with data from the

On June 8, Alton Co. issued an $95,000, 6%, 120-day note payable to Seller Co. What is the due date of the note?

The payroll register is a multicolumn form used to assemble the data related for all employees.

Which of the following is the most desirable quick ratio?

An employee receives an hourly rate of $45, with time and a half for all hours worked in excess of 40 during the week. Payroll data for the current week are as follows: hours worked, 48; federal income tax withheld, $950; Social security tax rate, 6.5% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings; state unemployment compensation tax, 3.4% on the first $7,000; federal unemployment compensation tax, .8% on the first $7,000. Calculate the employer's payroll tax expense if: a. this is the first payroll of the year and the employee has no cumulative earnings for the year to date. b. the employee's cumulative earnings for the year prior to this week equal $6,200. c. the employee's cumulative earnings for the year prior to this week equal $98,700. Employee wages = (40 x $45 + 8 x $67.50) $2,340

The journal entry a company uses to record accrued vacation privileges for its employees at the end of the year is

The following totals for the month of April were taken from the payroll register of Magnum Company. The entry to record accrual of employer's payroll taxes would include a

The payroll summary for December 31 for Waters Co. revealed total earnings of $80,000. Earnings subject to 6% social security tax were $60,000; earnings subject to 1.5% Medicare tax were $80,000; and earnings of $3,000 were subject to 4.3% state and 0.8% federal unemployment compensation tax. Journalize the entry to record the accrual of payroll taxes.

Like many taxes deducted from employee earnings, federal income taxes are subject to a maximum amount per employee per year.

Elgin Company sells merchandise with a one year warranty. Sales consisted of 2,500 units in 2012 and 2,000 units in 2013. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in 2012 and 70% in 2013 for the 2012 sales. Similarly, 30% of repairs will be made in 2013 and 70% in 2014 for the 2013 sales. In the 2013 income statement, how much of the warranty expense shown will be due to 2012 sales?

Depending upon when an unfunded pension liability is to be paid, it will be classified on the balance sheet as either a long-term or a current liability.

Proper payroll accounting methods are important for a business for all the reasons below except