Question 1

The Wage and Tax Statement is:

Accepted Answer

The Wage and Tax Statement is commonly known as Form W-2. It is used to report the wages paid to employees and the taxes withheld from their paychecks by their employers.

Question 2

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 Mission Company's amount for payroll taxes for Clark?

Accepted Answer

The answer of Mission Company has three employees:
\(\begin{array}{lcc}
&\text { Gross...

Question 3

A table that shows the amount of federal income tax to be withheld from an employee's pay is the:

Accepted Answer

The Wage Bracket Withholding Table is used to determine the amount of federal income tax to withhold from an employee's pay based on their earnings and tax status.

Question 4

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 Mission Company's amount for payroll taxes for Smith?

Accepted Answer

Smith's gross pay for August is $1,000. For FICA-Social Security, the tax is 6.20% on $1,000, which is $62. For FICA-Medicare, the tax is 1.45% on $1,000, which is $14.50. Smith's total payroll taxes are $62 + $14.50 = $76.50. However, since Smith's total gross pay through August ($3,200 + $1,000 = $4,200) is below $7,000, FUTA and SUTA taxes also apply. FUTA is 0.80% on $1,000, which is $8, and SUTA is 5.40% on $1,000, which is $54. Total payroll taxes are $62 + $14.50 + $8 + $54 = $138.50.

Question 5

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 expense at the end of 2011?

Accepted Answer

The answer of On October 10,2010,Printfast Company sells a commercial...

Question 6

If a company uses a special payroll bank account:

Accepted Answer

If a company uses a special payroll bank account, they will still need to issue paychecks or direct deposits, but the funds for the payroll will come from the payroll bank account, which is funded by a transfer from the regular bank account. This allows for easier tracking and management of payroll expenses. However, the company will still need to use a federal depository bank for the payroll, maintain a payroll register, and issue W-2's.

Question 7

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?

Accepted Answer

The answer of Mission Company has three employees:
\(\begin{array}{lcc}
&\text { Gross...

Question 8

If Jefferson Company paid a bonus equal to 8% of net income after bonuses and the total bonus distributed was $420,000,how much was net income for the year?

Accepted Answer

420,000 = .08(X - 420,000); 420,000 = .08X - 33,600; 453,600 = .08X; X = 5,670,000

Question 9

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

Accepted Answer

According to the U.S. Department of the Treasury, a Federal Depository Bank is a financial institution authorized to accept deposits of public money, such as tax payments and government agency funds. Therefore, only option C is the correct answer.

Question 10

For the year ended December 31,2010,Mason Company has implemented an employee bonus program equal to 7% of Mason's net income,which employees will share equally.Mason's net income (pre-bonus)is expected to be $3,500,000,and bonus expense is deducted in computing net income.What is the amount that needs to be recorded for estimated bonus liability for 2010?

Accepted Answer

B=.07(3,500,000-B); B = 245,000-.07B, 1.07B = 245,000; B = 228,972 (rounded)

Question 11

If Steve Company paid $350,000 in bonuses,and net income prior to the bonus was $4,200,000,what was the bonus percentage offered to the employees during 2010?

Accepted Answer

350,000=X(4,200,000-350,000); 350,000 = X(3,850,000); 350,000/3,850,000= .091 (rounded)

Question 12

An employer's federal unemployment taxes (FUTA)are reported:

Accepted Answer

FUTA taxes are reported annually, typically using IRS Form 940.

Question 13

The main purpose of the wage bracket withholding table is to:

Accepted Answer

The main purpose of the wage bracket withholding table is to compute federal income tax withholding. It helps employers determine how much federal income tax to withhold from an employee's wages based on their pay frequency, filing status, and number of allowances claimed on their W-4 form.

Question 14

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 2011?

Accepted Answer

2,350 * .04 = $94.00 - 80.00 = $14.00

Question 15

Conner Company borrows $185,600 cash on November 1,2010,by signing a 120-day,8% note.What is the total amount of interest expense that Conner will recognize?

Accepted Answer

185,600*.08*120/360 = 4,949

Question 16

An employee earnings report:

Accepted Answer

An employee earnings report is a cumulative record of an employee's hours worked, gross earnings, deductions, and net pay. It is not the W-2 or W-4 forms, which serve different purposes. It also differs from a pay stub, which only shows the pay period dates, hours worked, gross pay, deductions, and net pay for one specific pay period. Lastly, while an employee earnings report may be used to calculate taxes owed, it is not specifically used to compute federal income taxes withheld from gross pay.

Question 17

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 Mission Company's amount for payroll taxes for Cain?

Accepted Answer

The answer of Mission Company has three employees:
\(\begin{array}{lcc}
&\text { Gross...

Question 18

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?

Accepted Answer

2,350 * .04 = 94

Question 19

A special bank account used solely for the purpose of paying employees,is created by depositing the amount of each employees' net pay into the account every pay period.This account is referred to as a(n):

Accepted Answer

This type of bank account is specifically designed to hold funds that are used solely for paying employees. It is commonly referred to as a payroll bank account.

Question 20

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?

Accepted Answer

The answer of Mission Company has three employees:
\(\begin{array}{lcc}
&\text { Gross...

Quiz 9: Reporting and Analyzing Current Liabilities

The Wage and Tax Statement is:

A table that shows the amount of federal income tax to be withheld from an employee's pay is the:

If a company uses a special payroll bank account:

If Jefferson Company paid a bonus equal to 8% of net income after bonuses and the total bonus distributed was $420,000,how much was net income for the year?

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

If Steve Company paid $350,000 in bonuses,and net income prior to the bonus was $4,200,000,what was the bonus percentage offered to the employees during 2010?

An employer's federal unemployment taxes (FUTA) are reported:

The main purpose of the wage bracket withholding table is to:

Conner Company borrows $185,600 cash on November 1,2010,by signing a 120-day,8% note.What is the total amount of interest expense that Conner will recognize?

An employee earnings report:

A special bank account used solely for the purpose of paying employees,is created by depositing the amount of each employees' net pay into the account every pay period.This account is referred to as a(n) :