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Exam 11: Current Liabilities and Payroll

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Question 51

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Use this information for Harris Company to answer the following questions. ​ Assuming no employees are subject to ceilings for their earnings, Harris Company has the following information for the pay period of January 15-31. ​ ​ -Assume that social security taxes are payable at a 6.0% rate,Medicare taxes are payable at a 1.5% rate with no maximum earnings,and federal and state unemployment compensation taxes total 4.6% on the first $7,000 of earnings.If an employee earns $2,500 for the current week and the employee's year-to-date earnings before this week were $6,800,what is the total payroll tax related to the current week?

A) $187.50
B) $196.70
C) $344.50
D) $9.20

E) A) and D)
F) B) and C)

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Question 52

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Journalize the following transactions for Riley Corporation:

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Question 53

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Which of the following taxes would be deducted in determining an employee's net pay?

Federal income taxes withheld increase the employer's payroll tax expense.

Journalize the following entries on the books of the borrower and creditor.Label accordingly. (Assume a 360-day year is used for interest calculations.)​

One of the more popular defined contribution plans is the 401k plan.

The current assets and current liabilities for Kolbie Company and Newton Company are as follows:​ *These represent prepaid expenses and other non-quick current assets. (a) Determine the quick ratio for both companies.Round to two decimal places. (b) Interpret the quick ratio difference between the two companies.​

Blast sells portable CD players,and each unit carries a one-year replacement warranty.The cost of repair defects under the warranty is estimated at 10% of the sales price.During May,Blast sells 650 portable CD players for $50 each.For what amount in May would Blast debit Product Warranty Expense?

Which of the following is an example of a variable component of a payroll system?

Assuming a 360-day year,when a $20,000,90-day,5% interest-bearing note payable matures,total payment will be

Payroll taxes levied against employees become liabilities

A pension plan that promises employees a fixed annual pension benefit,based on years of service and compensation,is called a (n)

Depending on when an unfunded pension liability is to be paid,it will be classified on the balance sheet as either a long-term or a current liability.

Scott Company sells merchandise with a one-year warranty.Sales consisted of 2,500 units in Year 1 and 2,000 units in Year 2.It is estimated that warranty repairs will average $10 per unit sold,and 30% of the repairs will be made in Year 1 and 70% in Year 2 for the Year 1 sales.Similarly,30% of repairs will be made in Year 2 and 70% in Year 3 for the Year 2 sales.In the Year 3 income statement,how much of the warranty expense shown will be due to Year 1 sales?

According to a summary of the payroll of Scotland Company,$450,000 was subject to the 6.0% social security tax and $500,000 was subject to the 1.5% Medicare tax.Federal income tax withheld was $98,000.Also,$15,000 was subject to state (4.2%) and federal (0) 8%) unemployment taxes.The journal entry to record the accrued payroll taxes would include a​

Form W-2 is called the Wage and Tax Statement.

The payroll register of Seaside Architecture Company indicates $870 of social security and $217 of Medicare tax withheld on total salaries of $14,500 for the period.Assume earnings subject to state and federal unemployment compensation taxes are $5,250 at the federal rate of 0.8% and state rate of 5.4%.Prepare the journal entry to record the payroll tax expense for the period.

For Company A and Company B:​

The journal entry a company uses to record accrued vacation privileges for its employees at the end of the year is

FICA tax becomes a liability to the federal government at the time an employee's payroll is prepared.