Deck 7: Payroll and Income Tax

Question 1

In the portion formula, the commission a worker receives would be the base.

Answer 1

False

Question 2

A calendar year is July 1 to June 30.

Answer 2

False

Question 3

The Fair Labor Standards Act entitles employees to time and a half over 36 1/2 hours.

Answer 3

False

Question 4

Being paid biweekly is the same as being paid semimonthly.

Question 5

Gross pay = hours worked * rate per hour.

Question 6

An override can never help increase a manager's total pay.

Question 7

A variable commission scale means that for different levels of net sales there are different commission rates.

Question 8

The Federal Insurance Contributions Act funds the federal income tax program.

Question 9

An employee's commission is always based on total dollar sales.

Question 10

FICA stands for federal withholding tax.

Question 11

Overtime is always calculated at time and a half the regular rate.

Question 12

A draw is an advance that need not be repaid if the commission does not exceed the draw.

Question 13

Straight piece rate pay provides a worker an incentive to produce more since pay is based on the number of units produced.

Question 14

Differential pay means that there is one fixed rate per unit that is produced.

Question 15

A married person will pay in more Social Security and Medicare tax than a single person.

Question 16

Net pay - deductions = gross pay.

Question 17

Being paid biweekly means the salary is paid twice a month.

Question 18

The employer will match the employee's Social Security and Medicare contribution.

Question 19

The number of dependents one claims does not affect the amount of Social Security and Medicare tax paid.

Question 20

A self-employed person has at least three employees.

Question 21

Differential pay schedule is based on:

A) FICA
B) Different levels of performance
C) FUTA
D) Gross pay
E) None of these

Question 22

SUTA tax is usually paid quarterly.

Question 23

The Labor Fair Standards Act:

A) Sets minimum wage standards
B) Sets overtime regulations
C) Is a federal act
D) May exempt certain workers
E) All of these

Question 24

FUTA tax is computed by the wage-bracket table.

Question 25

Social Security and Medicare tax:

A) Have different rates
B) Are paid only by employees
C) Are based on the number of dependents not claimed
D) Are paid by only the employer
E) None of these

Question 26

The taxable earnings column of a payroll register shows the actual tax.

Question 27

The higher the number claimed on form W-2, the less in taxes will be taken out of one's paycheck.

Question 28

SUTA tax has no maximum amount that can be paid in a calendar year.

Question 29

A quarter is 13 weeks.

Question 30

John Flynn works at Stutz Toyota and is paid a(n) __________ against his earned commissions.

A) Bonus to one's salary
B) Salary
C) Draw
D) Amount that is never paid back
E) None of these

Question 31

The W-4 is used strictly to calculate Social Security and Medicare taxes.

Question 32

There is a maximum amount of Medicare tax an employee can contribute in a calendar year.

Question 33

The FICA tax now requires separate reporting for Social Security and Medicare.

Question 34

If you are paid twice a month, you are being paid:

A) Weekly
B) Biweekly
C) Semimonthly
D) Monthly
E) None of these

Question 35

Exempt wages means not taxable wages.

Question 36

The base amount for calculating Social Security taxes never changes from year to year.

Question 37

A taxpayer in the 25% bracket saves 25 cents in federal income tax for each dollar spent on a deductible expense.

Question 38

The percentage method can be used to determine the amount of FIT.

Question 39

Circular E from the Internal Revenue Service contains many tax tables.

Question 40

Payroll registers cannot record cumulative earnings.

Question 41

A merit rating system for SUTA means:

A) Rates cannot change
B) State rates will always be lower
C) Rate varies with employment record
D) FUTA will increase
E) None of these

Question 42

FICA tax base:

A) Never changes
B) Changes yearly
C) Changes once every two years
D) Is never more than $60,000
E) None of these

Question 43

Ron Swift earned $1,500 last week. He is married, is paid biweekly, and claims two exemptions. Using the percentage method, his income tax is:

A) $107.69
B) $116.40
C) $100.96
D) $140.88
E) None of these

Question 44

Jim Smith is a salesman who receives a $1,100 draw per week. He receives a 12% commission on all sales. Sales for Jim were $205,000 for the month. Assuming a four-week month, Jim's commission after the draw is:

A) $24,600
B) $20,200
C) $23,500
D) $26,400
E) None of these

Question 45

Jill Hartman earns $750 per week plus 3% of sales in excess of $6,500. If Jill sells $25,000 in the first week, her earnings are:

A) $945
B) $1,305
C) $1,500
D) $1,503
E) None of these

Question 46

Jim Ross is an automobile salesman who receives a salary of $500 per week plus a commission of 3% on all sales. During a four-week period he sold $42,000 worth of cars. What were Jim's average earnings?

A) $404
B) $1,760
C) $1,670
D) $440
E) None of these

Question 47

To date, Jay Ward has cumulative earnings of $107,600. This week he is paid $3,000. The total amount of Social Security tax for this week is (assume a rate of 6.2% on $110,100 for Social Security and 1.45% for Medicare):

A) $186.00
B) $155.00
C) $57.66
D) $180.00
E) None of these $2,500 * .062 = $155.

Question 48

Ron Smith has cumulative earnings of $110,100. This week he is paid $2,000. Assuming the Social Security rate is 6.2% on $107,900 and is 1.45% for Medicare, what is the amount of Social Security and Medicare taken out of Ron's earnings?

Question 49

Calculate the gross pay for Ryan O'Neal, an apple picker, assuming he picked 7,200 apples:

Question 50

Jeff Jones earns $1,200 per week. He is married and claims four withholding allowances. The Social Security rate is 6.2% on $110,100, and Medicare is 1.45%. To date his cumulative wages are $6,000. Each paycheck, his employer also deducts $42.50 for health insurance. What is his net pay? (Calculate FIT by percentage method.)

Question 51

The taxable earnings column of a payroll register records:

A) What wages will be taxed
B) The actual tax
C) The estimated tax
D) All of these
E) None of these

Question 52

The more allowances claimed on Form W-4:

A) The less money deducted for FIT
B) The more money deducted for FIT
C) No FIT ever deducted
D) FUTA increase
E) All of these

Question 53

Percentage method tables can show:

A) Weekly period rates
B) Biweekly payroll rates
C) Semimonthly payroll rates
D) Monthly payroll rates
E) All of these

Question 54

Bill Burton earns $750 per week plus 5% of sales in excess of $7,500. If Bill sells $34,000, how much are his earnings?

Question 55

The percentage method aids in calculating:

A) SUTA
B) FUTA
C) FICA
D) FIT
E) None of these

Question 56

Lana Powell has cumulative earnings of $110,000 at the end of September. In the first week in October she earns $2,000. The amount deducted for Social Security and Medicare from her check is (assume Social Security rate of 6.2% on $110,100 and Medicare of 1.45%):

A) $29.00
B) $35.20
C) $53.20
D) $92.00
E) None of these

Question 57

Bill Burne's earnings are subject to deductions for Social Security, Medicare, and FIT. To date his cumulative earnings are $110,000. This week Bill earns $1,200. Bill, who is married, is paid weekly and claims three exemptions. Assume the Social Security rate is 6.2% on $110,100 and 1.45% for Medicare. His net pay for the week is:

A) $528.43
B) $1,069.39
C) $1,690.93
D) $1,607.93
E) None of these

Question 58

Leo Corporation pays its employees on a graduated commission scale: 6% on the first $40,000 in sales, 7% on sales from $40,000 to $80,000, and 9% on sales greater than $80,000. Bernie Kaminsky had sales of $105,000. His commission is:

A) $2,400
B) $7,450
C) $5,200
D) $1,350
E) None of these

Question 59

Lee Wong is a sales clerk at Sears. She is paid $8.00 per hour plus a commission of 4% on all sales. Assuming Lee works 39 hours and has sales of $4,000, her gross pay is:

A) $312
B) $321
C) $472
D) $427
E) None of these

Question 60

FUTA tax is paid:

A) By an employee
B) By the employer
C) By both the employee and the employer
D) Only weekly
E) None of these

Question 61

Jim Jones, owner of Freed Company, has three employees who earn $410, $530, and $700, respectively. What is the individual amount Jim owes for state and federal unemployment for (A) the first 11 weeks and (B) week 20? (Assume a state rate of 5.4% and a federal rate of .8%.) Base is $7,000.

Question 62

Alvin Shore sells jewelry at Ross Jewelers. Ross pays Alvin $8.50 per hour plus a 6% commission on all sales. Assume Alvin works 36 hours and had sales of $4,900. What is Alvin's gross pay?

Question 63

Andrew Buckner earns $1,680 per week. He is married and claims three exemptions. What is Andrew's federal income tax? Use the percentage method.

Question 64

Janet Smooth pays her workers $175, $465, and $710, respectively, per week. Calculate what Janet will pay at the end of the first quarter for (A) state unemployment and (B) federal unemployment. Assume a state rate of 5.6%. Federal is .8%. Base is $7,000.

Question 65

Calculate the net pay. The balance before this weekly payroll is $90 below maximum as related to cumulative earnings in calculating Social Security. Assume a tax rate of 6.2% for Social Security on $110,100 and 1.45% for Medicare:

Question 66

Robin Small pays her three workers $180, $450, and $615, respectively, per week. Calculate what Robin will pay at the end of the first quarter for (A) state unemployment and (B) federal unemployment. Assume a state rate of 5.7%. Federal is .8%. Base is $7,000.

Question 67

Jill is $200 from reaching maximum base as related to cumulative earnings for Social Security. She is paid weekly:

Question 68

Molly Flynn, an accountant at Coor Company, earned $107,400 from January to June. In July, Molly earned $4,600. Assume a tax rate of 6.2% for Social Security on the first $110,100 and a Medicare rate of 1.45%. How much is the tax for Social Security and Medicare?

Question 69

Jim Dashinger is a salesman who receives a $100 draw per week. He receives a 12 1/2% commission on all sales. Sales for Jim for the month were $28,000. What did Jim receive after taking the draw into consideration? (Assume a five-week month.)

Question 70

Robert Bryan, Jr., earns $400 per week plus 3% of sales in excess of $7,000. If Robert sells $21,000, how much are his weekly earnings?

Question 71

Aley Company pays all its employees a graduated commission scale: 3% on the first $30,000 sales, 5% on sales from $30,001 to $110,000, and 7% on sales more than $110,000. Jim Jones, an employee of Aley, had $130,000 in sales. What commission did Jim earn?

Question 72

Calculate the gross pay of Alice Flynn, an apple picker, assuming she picked 6,250 apples:

Question 73

Mike Goldsmith is paid $6.40 per hour. Last week he worked 40 hours, and this week 60 hours. Calculate Mike's pay for each week (time and a half over 40 hours):

Question 74

Jim Push, a manager for Marvy Co., has weekly earnings subject to deductions for Social Security, Medicare, and FIT. Before this payroll, Jim is $500 below the maximum level for Social Security. What will his net pay be if he earns $760? Jim is married and claims one exemption. Use the percentage method. Assume a FICA tax rate of 6.2% on $106,800.

Question 75

Calculate the gross pay of Alice Flynn, a corn picker, assuming she picked 4,150 ears of corn:

Question 76

Rolf Company pays its employees on a graduated commission scale: 1% on the first $25,000 sales, 3% on sales from $25,001 to $95,000, and 5% on sales greater than $95,000. If John Jones, an employee of Rolf, had sales of $100,000, what commission did John earn?

Question 77

Paula Ryan pays her two employees $410 and $650 per week. Assume a state unemployment rate of 5.9% and a federal rate of .8%. What state and federal unemployment tax will Paula pay at the end of Quarter 1 and Quarter 2?

Question 78

Rodney Ranger is a shoe salesman for More Co. He is paid $4.60 per hour plus a commission of 3% on all sales. For the week, assuming Rodney works 30 hours and has sales of $2,400, what is his gross pay?

Question 79

Barry Katz earned $990 per week. He is married and claims three allowances. What is his federal income tax? (Use the percentage method.)

Question 80

Janice Tax, an accountant for Flee Corp., earned $102,700 from January to June. In July she earned $8,000. Assuming a FICA tax rate of 6.2% for Social Security on $110,100 and 1.45% for Medicare, (A) how much of this month's earnings are taxed for Social Security and Medicare? and (B) what is the amount of FICA tax for Social Security and Medicare?