Exam 8: Liabilities and Stockholders Equity

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 $106,800; and Medicare tax rate, 1.5% on all earnings.What is the gross pay for the employee?

Glow Co.reacquired 60,000 shares of its common stock at $25 per share.The balance of the treasury stock account is reported on the balance sheet as a(n):

A company sold 200 shares of common stock with a par value of $5 at a price of $12 per share.Which section of the statement of cash flows will contain this transaction?

The reduction of par or stated value of stock by issuance of a proportionate number of additional shares is termed a:

The total earnings of an employee for a payroll period is referred to as the net pay.

If 20,000 shares are authorized, 15,000 shares are issued, and 500 shares are reacquired, the number of outstanding shares is 19,500.

FICA tax is a payroll tax that is paid only by employers.

The primary purpose of a stock split is to reduce the number of shares outstanding in order to encourage more investors to enter the market for the company's shares.

ABC Co.has a gross payroll of $18,000.The FICA tax rate is 7.65% of the gross payroll, and the federal and state withholding are $1,600 and $963 respectively.On recording the payroll tax liability, net assets of the company:

When the contract rate of interest on bonds is less than the market rate of interest, the bonds sell at:

In order to record a contingent liability, the liability must be probable and reasonably estimated.

For the year that just ended, a company reports net income of $1,500,000.There are 500,000 shares authorized, 300,000 shares issued, and 250,000 shares of common stock outstanding.What is the earnings per share?

FICA tax is a payroll tax that is paid by both the employee and the employer.

Indicate whether the following actions would (+) increase, (?) decrease, or (0) not affect a company's total assets, liabilities, and stockholders' equity. ? Assets Liabilities Stockholders' Equity (1) Declaring a cash dividend (2) Paying the cash dividend declared in (1) (3) Declaring a stock dividend (4) Issuing stock certificates for the stock dividend declared in (3)

Medicare taxes are withheld from an employee's pay only till the employee has earned a specific amount each year.

Obligations that depend on past events and that are based on future transactions are contingent liabilities.

The FICA tax withheld from employees contributes to:

Most employers are required to withhold federal unemployment taxes from employee earnings.

Federal unemployment compensation tax becomes an employer's liability at the time the employees are paid.

Rico Inc.issues a 90-day, 4%, $3,000 note on account.This transaction: