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Exam 10: Current Liabilities and Payroll

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Question 41

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Use the following information to answer the following questions. Assuming no employees are subject to ceilings for their earnings, Jensen Company has the following information for the pay period of January 15 - 31, 20xx. Assuming that all wages are subject to federal and state unemployment taxes, the Payroll Taxes Expense would be recorded as:

A) $1,370
B) $750
C) $620
D) $2,870

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

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Question 42

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Journalize the following transactions for Riley Corporation:

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Question 43

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Chang Co. issued a $50,000, 120-day, discounted note to Guarantee Bank. The discount rate is 6%. Assuming a 360-day year, the cash proceeds to Chang Co. are

During its first year of operations, a company granted employees vacation privileges and pension rights estimated at a cost of $21,500 and $15,000. The vacations are expected to be taken in the next year and the pension rights are expected to be paid in the future 5-30 years. What is the total cost of vacation pay and pension rights to be recognized in the first year?

The cost of a product warranty should be included as an expense in the

Internal controls for cash payments also apply to payrolls.

Form W-4 is a form authorizing employers to withhold a portion of employee earnings for payment of an employee's federal income taxes.

The detailed record indicating the data for each employee for each payroll period and the cumulative total earnings for each employee is called the

While separation of duties may play a strong role in the internal control of inventory, it is significant in controlling payroll.

For proper matching of revenues and expenses, the estimated cost of fringe benefits must be recognized as an expense of the period during which the employee earns the benefits.

A pension plan which requires the employer to make annual pension contributions, with no promise to employees regarding future pension payments, is termed

Like many taxes deducted from employee earnings, federal income taxes are subject to a maximum amount per employee per year.

The journal entry a company uses to record the issuance of a note for the purpose of converting an existing account payable would be

Federal unemployment taxes are paid by the employer and the employee.

For an interest bearing note payable, the amount borrowed is equal to the face amount of the note.

The journal entry a company uses to record pension rights that have not been funded for its salaried employees, at the end of the year is

Dixon Sales has five sales employees which receive weekly paychecks. Each earns $10.25 per hour and each has worked 40 hours in the pay period. Each employee pays 12% of gross in Federal Income Tax, 3% in State Income Tax, 6% of gross in Social Security Tax, 1.5% of gross in Medicare Tax, and 1/2% in State Disability Insurance. Journalize the recognition of the pay period ending January 19th which will be paid to the employees January 26th. (Keep in mind that none of the employees is subject to a ceiling amount for social security.)

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

The payroll register is a multicolumn form used to assemble the data related for all employees.

The journal entry a company uses to record fully funded pension rights for its salaried employees at the end of the year is