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Exam 11: Current Liabilities and Payroll

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Question 81

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Assuming a 360-day year, when a $40,000, 90-day, 9% interest-bearing note payable matures, total payment will amount to:

A) $40,900
B) $43,600
C) $900
D) $3,600

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

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Question 82

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Which of the following would be used to compute the federal income taxes to be withheld from an employee's earnings?

A) FICA tax rate
B) wage and tax statement
C) FUTA tax rate
D) wage bracket and withholding table

E) None of the above
F) C) and D)

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Question 83

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For a current liability to exist, the following two tests must be met. The liability must be due usually within a year and must be paid out of current assets.

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

FICA tax is a payroll tax that is paid only by employers.

Generally, all deductions made from an employee's gross pay are required by law.

The use of a separate payroll bank account is not an advantageous control, because it creates more complexity in reconciliation functions for a company and invites theft.

The following information is for employee Ella Dodd for the week ended March 15. Total hours worked: 48 Rate: $15 per hour, with double time for all hours in excess of 40 Federal income tax withheld: $200 United Fund deduction: $50 Cumulative earnings prior to current week: $6,400 Tax rates: Social security: 6% on maximum earnings of $100,000. Medicare tax: 1.5% on all earnings. State unemployment: 3.4% on maximum earnings of $7,000; on employer Federal unemployment: 0.8% on maximum earnings of $7,000; on employer

The payroll register of Seaside Architecture Company indicates $970 of Social Security and $257 of Medicare tax withheld on total salaries of $16,500 for the period. Federal withholding for the period totaled $4,235. Provide the journal entry for the period's payroll.

Based on the following data, what is the acid-test ratio, rounded to one decimal point?

On January 5, 2014, Garrett Company, a calendar-year company, issued $1,000,000 of notes payable, of which $200,000 is due on January 1 for each of the next five years. The proper balance sheet presentation on December 31, 2014, is

A defined contribution plan promises employees a fixed annual pension benefit.

During May, Blast sold 650 portable CD players for $50 each. Each CD player cost Blast $25 to purchase and carried a one-year warranty. If 10 percent of the goods sold typically need to be replaced over the warranty period, what amount should Blast debit Product Warranty Expense for in May?

Vacation pay payable is reported on the balance sheet as a(n)

The total earnings of an employee for a payroll period is referred to as

Which of the following would most likely be classified as a current liability?

Which of the following are included in the employer's payroll taxes?

In a defined benefits plan, the employer bears the investment risks in funding a future retirement income benefit.

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

Each year there is a ceiling for the amount that is subject to all of the following except