Filters
Question type
Study Flashcards

A company's payroll information for the month of May follows: A company's payroll information for the month of May follows: On May 31 the company issued Check No. 4625 payable to the Payroll Bank Account to pay for the May payroll. It issued payroll checks to the employees after depositing the check. (1) Prepare the journal entry to record (accrue) the employer's payroll for May. (2) Prepare the journal entry to record payment of the May payroll. The federal and state unemployment tax rates are 0.6% and 5.4%, respectively, on the first $7,000 paid to each employee. The wages and salaries subject to these taxes were $6,000. (3) Prepare the journal entry to record the employer's payroll taxes. On May 31 the company issued Check No. 4625 payable to the Payroll Bank Account to pay for the May payroll. It issued payroll checks to the employees after depositing the check. (1) Prepare the journal entry to record (accrue) the employer's payroll for May. (2) Prepare the journal entry to record payment of the May payroll. The federal and state unemployment tax rates are 0.6% and 5.4%, respectively, on the first $7,000 paid to each employee. The wages and salaries subject to these taxes were $6,000. (3) Prepare the journal entry to record the employer's payroll taxes.

Correct Answer

verifed

verified

blured image *$6,000 *...

View Answer

An employee earns $9,450 for the current period. The cumulative earnings of previous pay periods is $110,000. Social security tax of 6.2% applies to the first $118,500 of employee earnings per calendar year and Medicare tax of 1.45% applies to all earnings. Calculate the total and individual amounts to be withheld for social security, Medicare and federal income tax (15% of earnings).

Correct Answer

verifed

verified

blured image *$118,500 - $110,00...

View Answer

An employee earnings report is a cumulative record of each employee's hours worked, gross earnings, deductions, and net pay.

A) True
B) False

Correct Answer

verifed

verified

A company's income before interest expense and income taxes is $350,000 and its interest expense is $100,000. Its times interest earned ratio is:


A) 0.29
B) 3.50
C) 2.50
D) 1.75
E) 0.50

F) A) and E)
G) None of the above

Correct Answer

verifed

verified

The entry to accrue payroll expenses and liabilities for employees will not include:


A) Liabilities to an employee union.
B) Liabilities to federal and state governments.
C) Expenses for state unemployment.
D) Expenses for gross wages and salaries.
E) Expenses for the employee portion of any medical insurance.

F) A) and B)
G) A) and C)

Correct Answer

verifed

verified

Payroll is an example of a contingent liability for the employer.

A) True
B) False

Correct Answer

verifed

verified

On May 22, Jarrett Company borrows $7,500 from Fairmont Financing, signing a 90-day, 8%, $7,500 note. What is the journal entry needed to record the transaction by Jarrett Company?


A) Debit Cash $7,500; credit Accounts Payable $7,500.
B) Debit Accounts Payable $7,500; credit Notes Payable $7,500.
C) Debit Cash $7,650; credit Notes Payable $7,650.
D) Debit Cash $7,500; credit Notes Payable $7,500.
E) Debit Notes Receivable $7,500; credit Cash $7,500.

F) B) and E)
G) A) and B)

Correct Answer

verifed

verified

What are estimated liabilities? Cite at least two examples and explain why they are classified as estimated liabilities.

Correct Answer

verifed

verified

Estimated liabilities are known obligati...

View Answer

The annual Federal Unemployment Tax Return is:


A) Form 940.
B) Form 1099.
C) Form 104.
D) Form W-2.
E) Form W-4.

F) None of the above
G) A) and B)

Correct Answer

verifed

verified

Employers can use a wage bracket withholding table to compute federal income taxes withheld from each employee's gross pay.

A) True
B) False

Correct Answer

verifed

verified

Vacation benefits are a type of _______________ liability.

Correct Answer

verifed

verified

A company's income before interest expense and income taxes is $302,400, and its interest expense is $62,000. Calculate the company's times interest earned ratio.

Correct Answer

verifed

verified

During June, Vixen Fur Company sells $850,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 3% of the selling price. Customers returned $14,000 of merchandise for warranty replacement during the month. The entry to record the estimated warranty provision at the end of the month is:


A) Debit Warranty Expense $11,500; credit Estimated Warranty Liability $11,500.
B) Debit Warranty Expense $14,000; credit Estimated Warranty Liability $14,000.
C) Debit Warranty Expense $25,500; credit Estimated Warranty Liability $25,500.
D) Debit Estimated Warranty Liability $14,000; credit Warranty Expense $14,000.
E) Debit Estimated Warranty Liability $11,500; credit Warranty Expense $11,500.

F) C) and D)
G) C) and E)

Correct Answer

verifed

verified

The Federal Insurance Contributions Act (FICA) requires that each employer file a:


A) W-4.
B) Form 941.
C) Form 1040.
D) Form 1099.
E) W-2.

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

Correct Answer

verifed

verified

Freedom Air collected $165,000 in February for charter flights booked for March and April and properly recorded the amount collected as Unearned Charter Revenue. The flights provided during March earned revenue of $83,400. The correct entry to record the revenue earned in March is:


A) Debit Cash $83,400; credit Flight Revenue $83,400.
B) Debit Unearned Charter Revenue $83,400; credit Flight Revenue $83,400.
C) Debit Unearned Charter Revenue $165,000; credit Flight Revenue $165,000.
D) Debit Flight Revenue $81,600; credit Accounts Receivable 81,600.
E) Debit Unearned Charter Revenue $83,400; credit Accounts Receivable $83,400.

F) A) and B)
G) C) and D)

Correct Answer

verifed

verified

The payroll records of a company provided the following data for the current weekly pay period ended March 12. The payroll records of a company provided the following data for the current weekly pay period ended March 12. Assume that the Social Security portion of the FICA taxes is 6.2% on the first $118,500 of earnings per calendar year and the Medicare portion is 1.45% of all wages paid to each employee for this pay period. The federal and state unemployment tax rates are 0.8% and 5.4%, respectively, on the first $7,000 paid to each employee. Calculate the net pay for each employee. Assume that the Social Security portion of the FICA taxes is 6.2% on the first $118,500 of earnings per calendar year and the Medicare portion is 1.45% of all wages paid to each employee for this pay period. The federal and state unemployment tax rates are 0.8% and 5.4%, respectively, on the first $7,000 paid to each employee. Calculate the net pay for each employee.

Correct Answer

verifed

verified

Trey Morgan is an employee who is paid monthly. For the month of January of the current year, he earned a total of $4,538. The FICA tax for social security is 6.2% of the first $118,500 earned each calendar year, and the FICA tax rate for Medicare is 1.45% of all earnings for both the employee and the employer. The amount of federal income tax withheld from his earnings was $680.70. What is the total amount of taxes withheld from the Trey's earnings?


A) $1,375.02
B) $746.50
C) $962.06
D) $1,027.86
E) $680.70

F) A) and B)
G) All of the above

Correct Answer

verifed

verified

Obligations not expected to be paid within the longer of one year or the company's operating cycle are reported as:


A) Current assets.
B) Current liabilities.
C) Long-term liabilities.
D) Operating cycle liabilities.
E) Bills.

F) A) and B)
G) None of the above

Correct Answer

verifed

verified

All of the following statements related to current liabilities for U.S. GAAP and IFRS are true except:


A) The definitions and characteristics of current liabilities are broadly similar for both U.S.GAAP and IFRS.
B) The term provision is typically used under IRFS to refer to what is titled liability under U.S.GAAP.
C) Because tax regulatory systems of countries are different, the approach to recording taxes is totally different.
D) When there is little uncertainty surrounding current liabilities, both require companies to record them in a similar manner.
E) When there is a known current obligation that involves an uncertain amount, but one that can be reasonable estimated, both require similar treatment.

F) A) and E)
G) A) and C)

Correct Answer

verifed

verified

Gary Marks is paid on a monthly basis. For the month of January of the current year, he earned a total of $8,288. FICA tax for Social Security is 6.2% on the first $118,500 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings. The FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $1,375.17. What is the amount of the employer's payroll taxes expenses for this employee?


A) $2,009.21
B) $1,131.31
C) $2,506.48
D) $420.00
E) $1,054.04

F) A) and E)
G) A) and D)

Correct Answer

verifed

verified

Showing 21 - 40 of 224

Related Exams

Exam 1

Introducing Financial Accounting

270 Questions

Exam 2

Accounting System and Financial Statements

236 Questions

Exam 3

Adjusting Accounts for Financial Statements

271 Questions

Exam 4

Reporting and Analyzing Merchandising Operations

263 Questions

Exam 5

Reporting and Analyzing Inventories

218 Questions

Exam 6

Reporting and Analyzing Cash and Internal Controls

215 Questions

Exam 7

Reporting and Analyzing Receivables

207 Questions

Exam 8

Reporting and Analyzing Long-Term Assets

255 Questions

Exam 10

Reporting and Analyzing Long-Term Liabilities

231 Questions

Exam 11

Reporting and Analyzing Equity

248 Questions

Exam 12

Reporting and Analyzing Cash Flows

226 Questions

Exam 13

Analyzing and Interpreting Financial Statements

223 Questions

Exam 14

Applying Present and Future Values

76 Questions

Exam 15

Investments and International Operations

215 Questions

Exam 16

Reporting and Analyzing Partnerships

168 Questions

Show Answer