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Exam 10: Current Liabilities and Payroll

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Question 81

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Match each payroll item that follows to the one item a-f) that best describes its characteristics. -Federal unemployment compensation tax FUTA)

A) Amount is limited, withheld from employee only
B) Amount is limited, withheld from employee and matched by employer
C) Amount is limited, paid by employer only
D) Amount is not limited, withheld from employee only
E) Amount is not limited, withheld from employee and matched by employer
F) Amount is not limited, paid by employer only

G) All of the above
H) B) and D)

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Question 82

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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.

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a) Vacation Pay Expe...

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Question 83

Multiple Choice

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A current liability is a debt that is reasonably expected to be paid

Match each payroll item that follows to the one item a-f) that best describes its characteristics. -FICA - Medicare

An aid in internal control over payrolls that indicates employee attendance is

Obligations that may arise from past transactions only if certain events occur in the future are contingent liabilities.

The payroll register of Seaside Architecture Company indicates $870 of social security and $217 of Medicare tax withheld on total salaries of $14,500 for the period. Assume earnings subject to state and federal unemployment compensation taxes are $5,250 at the federal rate of 0.8% and state rate of 5.4%. Prepare the journal entry to record the payroll tax expense for the period.

Use the following key a-d) to identify the proper treatment of each contingent liability. -Event is probable but amount is not estimable

Most employers use payroll checks drawn on a special bank account for paying the payroll.

The following totals for the month of June were taken from the payroll register of Young Company: The entry to record the accrual of employer's payroll taxes would include a debit to "0.8% Medicare rate" "1) 5%State unemployment tax rate" 5) 4%

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

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.

The journal entry to record the monthly payroll on April 30 would include a

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 of a liability but cannot be estimated

Baker Green's weekly gross earnings for the week ending December 7 were $2,500, and her federal income tax withholding was $525. Prior to this week Green had earned $98,000 for the year. Assuming the social security rate is 6% and Medicare is 1.5%, what is Green's net pay?

Sadie White receives an hourly rate of $30, 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, 48; federal income tax withheld, $300; social security tax rate, 6.0%; and Medicare tax rate, 1.5%. What is the net amount to be paid to White?

Vacation pay payable is reported on the balance sheet as an)

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

Journalize the following, assuming a 360-day year is used for interest calculations: Apr. 30 Issued a $150,000, 30-day, 6% note dated April 30 to Misner Co. on account. May 30 Paid Misner Co. the amount owed on the note dated April 30.

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