Question 1

ABC Grocers uses a separate checking account to pay their employees. The gross pay for the period was $850. However, after deductions were taken out, the net pay for the period was $790. The journal entry to record the issuance of payroll checks to their employees would include:
A)a credit to Salaries Payable for $850
B)a debit to Salaries Payable for $790
C)a debit to Salaries Payable for $850
D)a debit to Salaries Expense for $790

Accepted Answer

The journal entry to record the issuance of payroll checks should include a debit to Salaries Expense and a credit to Cash for the amount of net pay, which is $790 in this case. Salaries Payable is used when recording wages that have been earned but not paid out yet, so it should not be credited in this scenario. The gross pay of $850 is irrelevant when recording the issuance of payroll checks, as it is used to calculate deductions and not the actual amount paid to employees.

Question 2

Salespeople who are paid a percentage of net sales are paid on a(n)
A)salary basis.
B)hourly-rate basis.
C)commission basis
D)piece-rate basis.

Accepted Answer

Salespeople who are paid a percentage of net sales are typically paid on a commission basis, based on their ability to generate sales. This incentivizes them to sell more and earn more money, and it aligns their interests with the company's goals of increasing sales revenue. Salary, hourly-rate, and piece-rate pay structures would not provide this type of incentive.

Question 3

Assuming a Medicare tax rate of 1.45% and monthly gross wages of $2,500, the amount recorded in Medicare Tax Payable for one quarter for the employee's payroll deduction is
A)a credit for $108.75.
B)a credit for $36.25.
C)a debit for $36.25.
D)a debit for $108.75.

Accepted Answer

The Medicare tax rate is 1.45% of gross wages. For monthly gross wages of $2,500, the monthly Medicare tax is $2,500 * 1.45% = $36.25. For one quarter (3 months), this amounts to $36.25 * 3 = $108.75. Since this is an amount that the employer owes to the government, it is recorded as a credit in the Medicare Tax Payable account.

Question 4

Lacy Crawford has a regular hourly rate of $21.50. In a week when she worked 40 hours and had deductions of $110 for federal income tax, $53.32 for social security tax, and $12.47 for Medicare tax, her net pay was
A)$684.21
B)$860.00
C)$794.21
D)$750.00

Accepted Answer

Lacy's gross pay for 40 hours at $21.50 per hour is $860.00. Deducting the total taxes ($110 + $53.32 + $12.47 = $175.79) from her gross pay gives her a net pay of $860.00 - $175.79 = $684.21.

Question 5

Which of the following is a factor in the determination of the amount of social security tax to withhold from an employee's pay?
A)gross wages
B)marital status
C)withholding allowances claimed on Form W-4
D)hours worked during the pay period

Accepted Answer

The amount of social security tax to be withheld is calculated based on the employee's gross wages.

Question 6

Michael Miller is paid twice a month and had total gross earnings as of 10/15 of $116,800. His gross earnings for the period ending 10/31 were $6,000. If social security taxes are 6.2% on a maximum earnings of $122,700 per year and Medicare tax is 1.45% on all earnings, how much medicare tax will be paid by Michael and how much will be paid by his employer for the period ending 10/31?
A)Michael will pay $24.65 and his employer will also pay $24.65.
B)Michael will pay $87.00 and his employer is not required to pay any social security tax.
C)Michael will pay $24.65 and his employer will pay $87.00.
D)Michael will pay $87.00 and his employer will also pay $87.00.

Accepted Answer

Medicare tax is 1.45% on all earnings, so both Michael and his employer will pay 1.45% of $6,000, which is $87 each.

Question 7

An employee whose regular hourly rate is $10 and whose overtime rate is 1.5 times the regular rate worked 44 hours in one week. In the payroll register, the employer should record wages expense of
A)$460.
B)$340.
C)$400.
D)$60.

Accepted Answer

The employee earns $10 per hour for the first 40 hours, totaling $400. For the 4 overtime hours, the rate is 1.5 times the regular rate, so $10 * 1.5 = $15 per hour. The overtime pay is $15 * 4 = $60. Adding the regular pay ($400) and the overtime pay ($60) gives a total of $460.

Question 8

The Social Security Tax Payable account will normally have a(n)
A)debit or credit balance depending on the timing of payments.
B)credit balance.
C)debit balance.
D)zero balance.

Accepted Answer

The Social Security Tax Payable account is a liability account that represents the amount of social security tax owed to the government but not yet paid. Therefore, it normally has a credit balance, reflecting the company's obligation to pay this amount.

Question 9

An employee whose regular hourly rate is $9 and whose overtime rate is 1.5 times the regular rate worked 44 hours one week. The employee's gross pay was
A)$396.
B)$594.
C)$378.
D)$414.

Accepted Answer

The employee worked 40 regular hours and 4 overtime hours. Regular pay is 40 hours x $9 = $360. Overtime pay is 4 hours x ($9 x 1.5) = $54. Total gross pay is $360 + $54 = $414.

Question 10

Ramon Gonzalez's gross pay for the week was $700. He had deductions of $85 for federal income tax, $43.40 for social security tax, $10.15 for Medicare tax as well as $5 for union dues. The journal entry to record his federal income tax withheld would include:
A)a debit to Salaries Expense for $556.45
B)a debit to Salaries Payable for $700
C)a credit to Employee Income Tax Payable for $85
D)a debit to Employee Income Tax Payable for $85

Accepted Answer

A credit to Employee Income Tax Payable for $85 is correct because it reflects the amount withheld from Ramon Gonzalez's pay for federal income tax, which is a liability the company owes to the tax authorities on behalf of the employee.

Question 11

Lisa Ramos has a regular hourly rate of $12.75. In a week when she worked 40 hours and had deductions of $67.00 for federal income tax, $31.62 for social security tax, and $7.40 for Medicare tax, her net pay was
A)$616.02
B)$403.98
C)$510.00
D)$106.02

Accepted Answer

Lisa's gross pay for the week is $12.75 per hour x 40 hours = $510.00

Her total deductions are $67.00 + $31.62 + $7.40 = $105.02

Therefore, her net pay is $510.00 - $105.02 = $404.98, which rounds to $403.98 (B).

Question 12

Lila Harrison's is the sole employee of ABC Grocers. Her gross pay for the week was $400. She had deductions of $50 for federal income tax, $24.80 for social security tax, and $5.80 for Medicare tax. The journal entry to record her gross pay would include:
A)a credit to Salaries Payable for $400.00
B)a debit to Salaries Payable for $319.40
C)a debit to Salaries Expense for $319.40
D)a debit to Salaries Expense for $400.00

Accepted Answer

The gross pay is recorded as a debit to Salaries Expense for the full amount of $400.00 before deductions.

Question 13

Junkman Autos uses a separate checking account to pay their employees. The gross pay for the period was $1,000. However, after deductions were taken out, the net pay for the period was $820. The journal entry to record the issuance of payroll checks to their employees is:
A)

B)

C)

D)

Accepted Answer

The journal entry should reflect the payment made to employees. The Salaries Payable account should be credited for the amount of net pay ($820) and the Cash account should be debited for the same amount ($820). Therefore, Option D is the correct answer. Option B records the gross pay and does not reflect the deductions. Option A records the expense only and does not reflect the payment made. Option C records only the payment made, but does not reflect the liability created by gross pay.

Question 14

Publication 15, Circular E contains withholding information A)for federal and state income taxes. B)for social security and Medicare taxes only. C)for federal income taxes only. D)for social security, Medicare, and federal income tax taxes.

Accepted Answer

The answer of Publication 15, Circular E contains withholding information A)for...

Question 15

An employee whose regular hourly rate is $12 and whose overtime rate is 1.5 times the regular rate worked 48 hours in one week. The total overtime earned by the employee for the week is
A)$96.
B)$144.
C)$480.
D)$48.

Accepted Answer

To find the total overtime pay earned by the employee, we need to first calculate their regular pay and their overtime pay separately.

Regular pay for 40 hours = 40 x $12 = $480 
Overtime pay for 8 hours = 8 x 1.5 x $12 = $144

Therefore, the total overtime earned by the employee for the week is $144.

So the correct answer is (B).

Question 16

Michael Miller is paid twice a month and had total gross earnings as of 10/15 of $116,800. His gross earnings for the period ending 10/31 were $6,000. If social security taxes are 6.2% on a maximum earnings of $122,700 per year and Medicare tax is 1.45% on all earnings, how much social security tax will be paid by Michael and how much will be paid by his employer for the period ending 10/31?
A)Michael will pay $105.40 and his employer is not required to pay any social security tax.
B)Michael will pay $365.80 and his employer will also pay $365.80.
C)Michael will pay $372.00 and his employer will also pay $372.00.
D)Michael will pay $372.00 and his employer will pay $105.40.

Accepted Answer

Michael's total earnings after the period ending 10/31 are $116,800 + $6,000 = $122,800. Since the maximum earnings for social security taxes are $122,700, only $122,700 - $116,800 = $5,900 of his earnings are subject to the 6.2% social security tax. Therefore, both Michael and his employer will pay 6.2% of $5,900, which is $365.80 each.

Question 17

An employee whose regular hourly rate is $12 and whose overtime rate is 1.5 times the regular rate worked 48 hours in one week. In the payroll register, the employer should record an overtime premium of
A)$48.
B)$624.
C)$216.
D)$96.

Accepted Answer

The overtime premium is the additional amount paid for hours worked beyond the standard 40-hour workweek. The employee worked 8 hours of overtime (48 total hours - 40 standard hours). The overtime rate is 1.5 times the regular rate, so the overtime premium per hour is $12 * 0.5 = $6. For 8 hours of overtime, the total overtime premium is $6 * 8 = $48.

Question 18

An employee whose regular hourly rate is $20 and whose overtime rate is 1.5 times the regular rate worked 44 hours in one week. In the payroll register, the employer should record an overtime premium of
A)$120.
B)$880.
C)$440.
D)$40.

Accepted Answer

The answer of An employee whose regular hourly rate is...

Question 19

An employee whose regular hourly rate is $20 and whose overtime rate is 1.5 times the regular rate worked 45 hours one week. The employee's gross pay was
A)$950.
B)$900.
C)$800.
D)$1,350.

Accepted Answer

The employee's regular pay for 40 hours is $20 x 40 = $800. Overtime pay for 5 hours is 1.5 x $20 x 5 = $150. Total gross pay is $800 + $150 = $950.

Question 20

Assuming a Medicare tax rate of 1.45% and monthly gross wages of $5,000, the amount recorded in Medicare Tax Payable for one quarter for the employee's payroll deduction is
A)a debit for $217.50.
B)a debit for $72.50.
C)a credit for $217.50.
D)a credit for $72.50.

Accepted Answer

The Medicare tax is calculated as 1.45% of the monthly gross wages. For $5,000, the monthly Medicare tax is $72.50 ($5,000 * 1.45%). For one quarter (three months), this amounts to $217.50 ($72.50 * 3). Since this is an amount that the employer owes to the government, it is recorded as a credit in the Medicare Tax Payable account.

Quiz 10: Payroll Computations, Records, and Payment

ABC Grocers uses a separate checking account to pay their employees. The gross pay for the period was $850. However, after deductions were taken out, the net pay for the period was $790. The journal entry to record the issuance of payroll checks to their employees would include:

Salespeople who are paid a percentage of net sales are paid on a(n)

Assuming a Medicare tax rate of 1.45% and monthly gross wages of $2,500, the amount recorded in Medicare Tax Payable for one quarter for the employee's payroll deduction is

Lacy Crawford has a regular hourly rate of $21.50. In a week when she worked 40 hours and had deductions of $110 for federal income tax, $53.32 for social security tax, and $12.47 for Medicare tax, her net pay was

Which of the following is a factor in the determination of the amount of social security tax to withhold from an employee's pay?

An employee whose regular hourly rate is $10 and whose overtime rate is 1.5 times the regular rate worked 44 hours in one week. In the payroll register, the employer should record wages expense of

The Social Security Tax Payable account will normally have a(n)

An employee whose regular hourly rate is $9 and whose overtime rate is 1.5 times the regular rate worked 44 hours one week. The employee's gross pay was

Ramon Gonzalez's gross pay for the week was $700. He had deductions of $85 for federal income tax, $43.40 for social security tax, $10.15 for Medicare tax as well as $5 for union dues. The journal entry to record his federal income tax withheld would include:

Lisa Ramos has a regular hourly rate of $12.75. In a week when she worked 40 hours and had deductions of $67.00 for federal income tax, $31.62 for social security tax, and $7.40 for Medicare tax, her net pay was

Lila Harrison's is the sole employee of ABC Grocers. Her gross pay for the week was $400. She had deductions of $50 for federal income tax, $24.80 for social security tax, and $5.80 for Medicare tax. The journal entry to record her gross pay would include:

Junkman Autos uses a separate checking account to pay their employees. The gross pay for the period was $1,000. However, after deductions were taken out, the net pay for the period was $820. The journal entry to record the issuance of payroll checks to their employees is:

Publication 15, Circular E contains withholding information

An employee whose regular hourly rate is $12 and whose overtime rate is 1.5 times the regular rate worked 48 hours in one week. The total overtime earned by the employee for the week is

An employee whose regular hourly rate is $12 and whose overtime rate is 1.5 times the regular rate worked 48 hours in one week. In the payroll register, the employer should record an overtime premium of

An employee whose regular hourly rate is $20 and whose overtime rate is 1.5 times the regular rate worked 44 hours in one week. In the payroll register, the employer should record an overtime premium of

An employee whose regular hourly rate is $20 and whose overtime rate is 1.5 times the regular rate worked 45 hours one week. The employee's gross pay was

Assuming a Medicare tax rate of 1.45% and monthly gross wages of $5,000, the amount recorded in Medicare Tax Payable for one quarter for the employee's payroll deduction is