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Exam 10: Liabilities: Current,installment Notes,and Contingencies

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Question 71

Multiple Choice

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Each year there is a ceiling for the amount that is subject to all of the following except

A) social security tax
B) federal income tax
C) federal unemployment tax
D) state unemployment tax

E) All of the above
F) None of the above

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Question 72

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Dixon Sales has seven sales employees that receive weekly paychecks.Each earns $10.25 per hour and each has worked 40 hours in the pay period.Each employee pays 12% of gross in federal income tax,3% of gross in state income tax,6% of gross in social security tax,1.5% of gross in Medicare tax,and 0.5% of gross in state disability insurance.Journalize the recognition of the pay period ending January 19 which will be paid to the employees January 26.

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Question 73

Multiple Choice

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Match the following terms or phrases in (a-g) with the explanations in 1-8.Terms or phrases may be used more than once. -Probable likelihood and estimable liability

Which of the following taxes would be deducted in determining an employee's net pay?

The total earnings of an employee for a payroll period is referred to as

Martin Services Company provides its employees vacation benefits and a defined contribution pension plan.Employees earned vacation pay of $39,500 for the period.The pension plan requires a contribution to the plan administrator equal to 9% of employee salaries.Salaries were $750,000 during the period.Provide the journal entries for (a)the vacation pay and (b)the pension benefit.

Federal unemployment compensation taxes that are collected by the federal government are not paid directly to the unemployed but are allocated among the states for use in state programs.

On August 1,Batson Company issued a 60-day note with a face amount of $140,000 to Jergens Company for merchandise inventory.(Assume a 360-day year is used for interest calculations.) a. Determine the proceeds of the note assuming the note carries an interest rate of 6%. b. Determine the proceeds of the note assuming the note is discounted at 6%.

The payroll summary for December 31 for Waters Co.revealed total earnings of $80,000.All earnings are subject to social security tax of 6.0% and Medicare tax of 1.5%.Journalize the entry to record the accrual of employer payroll taxes.

McKay Company sells merchandise with a one-year warranty.In Year 1,sales consisted of 1,200 units.It is estimated that warranty repairs will average $10 per unit sold,and 30% of the repairs will be made in Year 1 and 70% in Year 2.In the Year 1 income statement,McKay should show warranty expense of

On June 8,Smith Technologies issued a $75,000,6%,140-day note payable to Johnson Company.What is the due date of the note?

Form W-4 is a form authorizing employers to withhold a portion of employee earnings for payment of an employee's federal income taxes.

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

Thomas Martin receives an hourly wage rate of $40,with time and a half for all hours worked in excess of 40 hours during a week.Payroll data for the current week are as follows: hours worked,48; federal income tax withheld,$350; social security tax rate,6.0%; and Medicare tax rate,1.5%.What is the gross pay for Martin?

Journalize the following,assuming a 360-day year is used for interest calculations: ​

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

Match the following terms or phrases in (a-g) with the explanations in 1-8.Terms or phrases may be used more than once. -(Cash + Temporary investments + Accounts receivable) / Current liabilities

A defined contribution plan promises employees a fixed annual pension benefit.

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,6.0%; and Medicare tax rate,1.5%; state unemployment compensation tax,3.4% on the first $7,000; federal unemployment compensation tax,0.8% 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.

The borrower issues a note payable to a creditor.