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Exam 11: Current Liabilities and Payroll Accounting

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Question 71

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The total compensation an employee earns including wages, salaries, commissions, bonuses, and any compensation earned before deductions such as taxes is called ________.

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Question 72

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Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of $8,260. The FICA tax for social security is 6.2% of the first $118,500 of employee earnings each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The FUTA tax rate of .6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee's pay. The amount of federal income tax withheld from her earnings was $1,325.17. Her net pay for the month is: (Round your intermediate calculations to two decimal places.)

A) $6,422.71
B) $5,868.94
C) $6,246.94
D) $6,302.94
E) $7,194.11

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

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Question 73

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Employee vacation benefits:

All of the following statements regarding long-term liabilities are true except?

A ________ is a potential obligation that depends on a future event arising from a past transaction or event.

Accrued vacation benefits are a form of estimated liability for an employer.

On November 1, Casey's Snowboards signed a $12,000, 90-day, 5% note payable to cover a past due account payable. a. What amount of interest expense on this note should Casey's Snowboards report on year-end December 31? b. Prepare Casey's journal entry to record the issuance of the note payable. c. Prepare Casey's adjusting journal entry at the end of the year d. Prepare Casey's journal entry to record the payment of the note on February 1 of the following year.

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. -His net pay for the month is:

A payroll register does not include:

If the times interest earned ratio:

A ________ is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer.

Accounts payable are:

The difference between the amount borrowed and the amount repaid is referred to as ________.

The amount of federal income taxes withheld from an employee's paycheck is determined by:

An employee earned $4,600 in February working for an employer. Cumulative earnings of the previous pay periods are $4,800. The FICA tax rate for Social Security is 6.2% of the first $118,500 of earnings each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current 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. What is the amount the employer should record as payroll taxes expense for the month of February?

A corporation has a $40,000 credit balance in the Income Tax Payable account. Period end information shows that the actual liability is $47,000. The company should record an entry to debit Income Tax Expense for $7,000 and credit Income Taxes Payable for $7,000.

FUTA taxes are:

Accounting for contingent liabilities covers three possibilities: (1) The future event is probable and the amount cannot be reasonably estimated; (2) The future event is remote or unlikely to recur; (3) The likelihood of the liability to occur is impossible.

Obligations to be paid within one year or the company's operating cycle, whichever is longer, are:

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