A company's employees had the following earnings records at the close of the current payroll period: $\begin{array}{|l|r|r|} \hline\text { Employees } & \begin{array}{c} \text { Earnings through } \\ \text { Prior Pay Period } \end{array} & \begin{array}{c} \text { Earnings this Pay } \\ \text { Period } \end{array}\\ \hline \text { D. Adams } & \$ 11,300 & \$ 3,900 \\ \hline \text { J. Hess } & 6,100 & 2,500 \\ \hline \text { R. Lui } & 9,500 & 3,100 \\ \hline \text { T. Morales } & 4,800 & 1,400 \\ \hline \text { L. Vang } & 10,000 & 3,000\\ \hline \end{array}$ The company's payroll taxes expense on each employee's earnings includes: FICA Social Security taxes of 6.2% on the first $87,000 plus 1.45% FICA Medicare on all wages; 0.8% federal unemployment taxes on the first $7,000; and 2.5% state unemployment taxes on the first $7,000.Compute the employer's total payroll taxes expense for the current pay period.

\[\begin{array} { | l | r | r | } \hlin

Mission Company has three employees: $\begin{array}{lcc} &\text { Gross Pay through July}&\text { Gross Pay for August }\\ \text { Smith } & \$ 3,200 & \$ 1,000 \\ \text { Cain } & 25,800 & 3,500 \\ \text { Clark } & 94,600 & 13,100 \end{array}$ $\text { The company is subject to the following taxes: }$ $\begin{array} { l c l } \text { Tax } & \text { Rate } & \text { Applied To } \\ \text { FICA-Social Security } & 6 . 2 0 \% & \text { First } \$ 106,800 \\ \text { FICA-Medicare } & 1.45 & \text { All grosspay } \\ \text { FUTA } & . 8 0& \text { First } \$ 7,000 \\ \text { SUTA } & 5.40 & \text { First } \$ 7,000 \end{array}$ What is the amount that Mission Company will withhold from Clark's gross pay?

A) $ 946.35 B) $1,002.15 C) $1,814.35 D) $6,234.75 E) $812.20 A) $ 946.35 B) $1,002.15 C) $1,814.35 D) $6,234.75 E) $812.20

A) Social Security taxes B) Charitable giving C) Employee income taxes D) Unemployment taxes E) Federal Taxes A) Social Security taxes B) Charitable giving C) Employee income taxes D) Unemployment taxes E) Federal Taxes

Exam 9: Reporting and Analyzing Current Liabilities

On October 10,2010,Printfast Company sells a commercial printer for $2,350 with a one year warranty that covers parts.Warranty expense is project to be 4% of sales.On February 28,2011,the printer requires repairs.The cost of the parts for the repair is $80 and Printfast pays their technician $150 to perform the repair.What is the warranty liability at the end of 2010?

(Multiple Choice)

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Question 81

The Form W-2 must be given to employees before January 31 following the year covered by the Form W-2.

(True/False)

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Question 82

Unearned revenue is another name for sales.

(True/False)

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Question 83

A company borrowed $60,000 on a 60-day,10% note payable from its bank.Compute the total cash payment at the note's maturity.

(Essay)

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Question 84

A bank that is authorized to accept amounts payable to the federal government is a:

(Multiple Choice)

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Question 85

A company's payroll information for the month of May follows: Administrative salaries \ 2,000 Sales salaries 3,500 Shop wages 4,000 FICA taxes withheld 700 Federal incometaxes withheld 1,300 Medical insurance premiums withheld 415 Union dues withheld 205 On May 31 the company issued Check No.335 payable to the Payroll Bank Account 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 pay for the May payroll.The federal and state unemployment tax rates are 0.8% 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.

(Essay)

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Question 86

A company's employees had the following earnings records at the close of the current payroll period: Employees Earnings through Prior Pay Period Earnings this Pay Period D. Adams \ 11,300 \ 3,900 J. Hess 6,100 2,500 R. Lui 9,500 3,100 T. Morales 4,800 1,400 L. Vang 10,000 3,000 The company's payroll taxes expense on each employee's earnings includes: FICA Social Security taxes of 6.2% on the first $87,000 plus 1.45% FICA Medicare on all wages; 0.8% federal unemployment taxes on the first $7,000; and 2.5% state unemployment taxes on the first $7,000.Compute the employer's total payroll taxes expense for the current pay period.

(Essay)

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Question 87

The Wage and Tax Statement is:

(Multiple Choice)

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Question 88

Youngsong Martin,the founder of Wildflower Linen,realized that effectively managing payroll was crucial to the success of her business.If an employee of the company earns $50,500 per year,Wildflower Linen's total FICA payroll tax for this employee is:

(Multiple Choice)

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Question 89

A company has 2 employees whose total January salaries are totaled $8,000.The federal income tax rate for both employees is 15%.The FICA-social security tax is 6.2% and the FICA-Medicare tax is 1.45%.Calculate the amount of employee taxes withheld and prepare the company's journal entry to accrue the January salaries expense and withholding of January taxes.

(Essay)

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Question 90

FUTA requires employers to pay a federal unemployment tax on the first $7,000 in salary or wages paid to each employee.

(True/False)

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Question 91

If a company had net income of $2,379,600,interest expense of 234,000,a tax rate of 40%,and operating income of 4,200,000,what would the times interest earned ratio be for the company?

(Multiple Choice)

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Question 92

Mission Company has three employees: Gross Pay through July Gross Pay for August Smith \ 3,200 \ 1,000 Cain 25,800 3,500 Clark 94,600 13,100 $\text { The company is subject to the following taxes: }$ Tax Rate Applied To FICA-Social Security 6.20\% First \ 106,800 FICA-Medicare 1.45 All grosspay FUTA .80 First \ 7,000 SUTA 5.40 First \ 7,000 What is the amount that Mission Company will withhold from Clark's gross pay?

(Multiple Choice)

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Question 93

The full disclosure principle requires the reporting of contingent liabilities that are reasonably possible.

(True/False)

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Question 94

Unearned revenues are amounts received _______________ for future products or services.

(Short Answer)

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Question 95

A lawsuit is an example of a contingent liability for the defendant.

(True/False)

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Question 96

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.

(Short Answer)

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Question 97

FICA taxes include:

(Multiple Choice)

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Question 98

Miller Company has a times interest earned ratio of 5.Sales and variable expenses were $57,290 and $40,105 respectively.Compute the company's fixed interest expense.

(Multiple Choice)

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Question 99

__________ are obligations due within one year or the company's operating cycle,whichever is longer.

(Short Answer)

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Question 100

The Form W-2 must be given to employees before January 31 following the year covered by the Form W-2.

Unearned revenue is another name for sales.

A company borrowed $60,000 on a 60-day,10% note payable from its bank.Compute the total cash payment at the note's maturity.

A bank that is authorized to accept amounts payable to the federal government is a:

The Wage and Tax Statement is:

Youngsong Martin,the founder of Wildflower Linen,realized that effectively managing payroll was crucial to the success of her business.If an employee of the company earns $50,500 per year,Wildflower Linen's total FICA payroll tax for this employee is:

FUTA requires employers to pay a federal unemployment tax on the first $7,000 in salary or wages paid to each employee.

If a company had net income of $2,379,600,interest expense of 234,000,a tax rate of 40%,and operating income of 4,200,000,what would the times interest earned ratio be for the company?

The full disclosure principle requires the reporting of contingent liabilities that are reasonably possible.

Unearned revenues are amounts received _______________ for future products or services.

A lawsuit is an example of a contingent liability for the defendant.

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.

FICA taxes include:

Miller Company has a times interest earned ratio of 5.Sales and variable expenses were $57,290 and $40,105 respectively.Compute the company's fixed interest expense.

__________ are obligations due within one year or the company's operating cycle,whichever is longer.

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

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