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 Smith's gross pay?

A) $ 62.00 B) $138.50 C) $443.20 D) $581.70 E) $76.50 A) $ 62.00 B) $138.50 C) $443.20 D) $581.70 E) $76.50

A) Must be certain B) Must sometimes be estimated C) Must be for a specific amount D) Must always have a definite date for payment E) Must involve an outflow of cash A) Must be certain B) Must sometimes be estimated C) Must be for a specific amount D) Must always have a definite date for payment E) Must involve an outflow of cash

Exam 9: Reporting and Analyzing Current Liabilities

The Orlando Magic received $6 million cash in advance season ticket sales.Prior to the beginning of the basketball season,these sales are recorded as a credit to unearned season ticket revenue.

(True/False)

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Question 121

______________ are amounts owed to suppliers for products or services purchased on credit.

(Short Answer)

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Question 122

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

(Multiple Choice)

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Question 123

Pastimes Co.offers its employees a bonus equal to 2% of the company's net income.The estimated net income for the year is expected to be $850,000.Prepare the general journal entry to record the employee bonus plan expense.

(Essay)

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Question 124

If a company uses a special payroll bank account:

(Multiple Choice)

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Question 125

The FICA tax for social security is 6.2% and the FICA tax for Medicare is 1.45%.An employee's share of both FICA taxes was $3,901.50.Given that this employee did not exceed the FICA earnings limitation,compute gross pay.

(Multiple Choice)

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Question 126

Employer payroll taxes are an added employee _______________ beyond the wages and salaries earned by the employees.

(Short Answer)

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Question 127

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 Smith's gross pay?

(Multiple Choice)

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Question 128

Explain the responsibilities and necessary accounting procedures that employers must follow for employee payroll deductions.

(Essay)

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Question 129

Vacation benefits are a type of _______________ liability.

(Short Answer)

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Question 130

A _____________________ shows the pay period dates,hours worked,gross pay,deductions and net pay of each employee for every pay period.

(Short Answer)

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Question 131

Explain how to calculate times interest earned and explain how it is used to analyze a company.

(Essay)

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Question 132

Times interest earned can be calculated by multiplying income by the interest rate on a company's debt.

(True/False)

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Question 133

Gross pay less all deductions is called ____________________.

(Short Answer)

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Question 134

Liabilities:

(Multiple Choice)

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Question 135

Employees earn vacation pay at the rate of one day per month.During July,25 employees qualify for one vacation day each.Their average daily wage is $100 per day.What is the amount of vacation benefit expense for the month of July?

(Multiple Choice)

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Question 136

Match each of the following terms with the appropriate definitions.

Deferred income tax liability

A record for a pay period that shows the pay period dates, regular and overtime hours worked, gross pay, net pay and deductions

Gross pay

Income before interest expense and income taxes divided by interest expense

Federal depository bank

Total compensation earned by an employee

Correct Answer:

Verified

Deferred income tax liability

Gross pay

Federal depository bank

Short-term note payable

Warranty

Payroll register

Current liabilities

Employee benefits

Payroll bank account

Times interest earned

(Matching)

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Question 137

A company's income before interest expense and income taxes was $395,000 in 2010 and $427,000 in 2011.Its fixed interest expense was $125,000 for both years.Calculate the company's times interest earned ratio and comment on its level of risk.

(Essay)

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Question 138

An employee earned $4,300 working for an employer.The current rate for FICA social security is 6.2% and the FICA Medicare rate is 1.45%.The employer's total FICA payroll tax for this employee is:

(Multiple Choice)

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Question 139

Identify the types of payroll records prepared for each pay period and each employee.

(Essay)

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Question 140

The Orlando Magic received $6 million cash in advance season ticket sales.Prior to the beginning of the basketball season,these sales are recorded as a credit to unearned season ticket revenue.

______________ are amounts owed to suppliers for products or services purchased on credit.

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

Pastimes Co.offers its employees a bonus equal to 2% of the company's net income.The estimated net income for the year is expected to be $850,000.Prepare the general journal entry to record the employee bonus plan expense.

If a company uses a special payroll bank account:

The FICA tax for social security is 6.2% and the FICA tax for Medicare is 1.45%.An employee's share of both FICA taxes was $3,901.50.Given that this employee did not exceed the FICA earnings limitation,compute gross pay.

Employer payroll taxes are an added employee _______________ beyond the wages and salaries earned by the employees.

Explain the responsibilities and necessary accounting procedures that employers must follow for employee payroll deductions.

Vacation benefits are a type of _______________ liability.

A _____________________ shows the pay period dates,hours worked,gross pay,deductions and net pay of each employee for every pay period.

Explain how to calculate times interest earned and explain how it is used to analyze a company.

Times interest earned can be calculated by multiplying income by the interest rate on a company's debt.

Gross pay less all deductions is called ____________________.

Liabilities:

Employees earn vacation pay at the rate of one day per month.During July,25 employees qualify for one vacation day each.Their average daily wage is $100 per day.What is the amount of vacation benefit expense for the month of July?

A company's income before interest expense and income taxes was $395,000 in 2010 and $427,000 in 2011.Its fixed interest expense was $125,000 for both years.Calculate the company's times interest earned ratio and comment on its level of risk.

An employee earned $4,300 working for an employer.The current rate for FICA social security is 6.2% and the FICA Medicare rate is 1.45%.The employer's total FICA payroll tax for this employee is:

Identify the types of payroll records prepared for each pay period and each employee.

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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