FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 11: Current Liabilities and Payroll

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Multiple Choice

Review LaterAdd Note

Review Later

An employee receives an hourly rate of $27, with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $350; cumulative earnings for year prior to current week, $99,700; social security tax rate, 6.0% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings. What is the net amount to be paid to the employee?

A) $713.75
B) $935.15
C) $764.75
D) $873.77

E) A) and D)
F) A) and C)

Correct Answer

verified

B

Question 2

Multiple Choice

Review LaterAdd Note

Review Later

Assuming no employees are subject to ceilings for their earnings, Moore Company has the following information for the pay period of December 15 - 31, 20xx. Salaries Payable would be recorded for

A) $16,000
B) $ 9,808
C) $10,800
D) $11,040

E) B) and D)
F) None of the above

Correct Answer

verified

Show Answer

Question 3

Multiple Choice

Review LaterAdd Note

Assuming a 360-day year, when a $30,000, 90-day, 5% interest-bearing note payable matures, total payment will amount to:

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.

Federal unemployment compensation taxes that are collected by the federal government are paid directly to the unemployed but are allocated among the states for use in state programs.

A business issued a 120-day, 6% note for $10,000 to a creditor on account. The company uses a 360-day year for interest calculations. Journalize the entries to record (a) the issuance of the note and (b) the payment of the note at maturity, including interest.

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

An employee receives an hourly rate of $15, 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, 46; federal income tax withheld, $110; cumulative earnings for the year prior to this week, $24,500; Social security tax rate, 6% 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. What is the net amount to be paid to the employee?

A pension plan which requires the employer to make annual pension contributions, with no promise to employees regarding future pension payments, is termed

For proper matching of revenues and expenses, the estimated cost of fringe benefits must be recognized as an expense of the period during which the employee earns the benefits.

Which of the following is an example of a variable component of a payroll system?

During May, Blast sold 650 portable CD players for $50 each. Each CD player cost Blast $25 to purchase and carried a one-year warranty. If 10 percent of the goods sold typically need to be replaced over the warranty period, what amount should Blast debit Product Warranty Expense for in May?

Generally, all deductions made from an employee's gross pay are required by law.

Payroll taxes levied against employees become liabilities

The journal entry a company uses to record the estimated accrued product warranty liability is

The summary of the payroll for the monthly pay period ending July 15 indicated the following: Journalize the entries to record (a) the payroll and (b) the employer's payroll tax expense for the month. The state unemployment tax rate is 3.1%, and the federal unemployment tax rate is 0.8%. Only $25,000 of salaries are subject to unemployment taxes.

The journal entry a company uses to record fully funded pension rights for its salaried employees at the end of the year is

Taxes deducted from an employee's earnings to finance social security and Medicare benefits are called FICA taxes.

Journalize the following transactions for Riley Corporation:

On July 8, Alton Co. issued an $80,000, 6%, 120-day note payable to Seller Co. Assume that the fiscal year of Alton Co. ends July 31. Using the 360-day year in your calculations, what is the amount of interest expense recognized by Alton in the current fiscal year?