Quiz III

Prior to the current pay period Mr. Cho has year-to-date (YTD) cumulative gross earnings of $131,600. Mr. Cho earns $6,800 during the current pay period. If the PICA rate is 6.2% for Social Security, with a limit of $132,900, and 1.45% for Medicare, with no limit, the Cho's share of FICA tax allocated to Social Security is A) $80.60 B) $98.60 C) $18.85 D) $341.00 E) None of these

A) $80.60

Barbara receives an annual salary of $25,500 plus a 5% commission on all sales during the year in excess of $100,000. Her sales for the year total $210,000. Her total gross earnings for the year amount to A) $26,775 B) $31,000 C) $30,500 D) $36,000 E) None of these

B) $31,000

The employer records the amount of federal income tax withheld as A) An expense B) A liability C) An asset D) Payroll tax expense E) None of these

B) A liability

The structure of the general journal entry to record the payroll is A) Debit salaries payable, Credit cash B) Debit salaries expense, Credit liabilities for employee withholdings, Credit salaries payable C) Debit salaries payable, Credit each employee deduction as an expense D) Debit salaries expense, Credit each employee deduction as a liability E) None of these

B) Debit salaries expense, Credit liabilities for employee withholdings, Credit salaries payable

The entry to record the payroll tax expense includes all except the following: A) Federal Unemployment Tax Payable B) FICA Tax Payable C) Employees' Federal Income Tax Payable D) State Unemployment Tax Payable E) None of these

C) Employees' Federal Income Tax Payable

Employers are generally required to contribute payroll taxes consisting of the following: A) Federal unemployment B) State unemployment C) Social Security / Medicre D) All of these E) None of these

D) All of these

Generally employers are required to withhold from employees for A) Federal income tax B) Medicare C) Social Security D) All of these E) None of these

D) All of these

Prior to the current pay period Ms. Born has year-to-date (YTD) cumulative earnings of $6,800. Ms. Born earned $950 during the current pay period. State Unemployment Tax is calculated on the first $7,000 of calendar year gross earnings; Federal Unemployment Tax is calculated o the first $7,000 of calendar year gross earnings; Social Security Tax is calculated on the first $132,900 of the calendar year earnings; Medicare Tax is calculated on all calendar year earnings Therefore, the amounts (i.e. Current Pay Period Gross Earnings) used to calculate withholdings and payroll taxes for the current pay period are which of the following? A) State Unemployment, $750; Federal Unemployment, $750; Social Security, $950; and Medicare, $950 B) State Unemployment, $0; Federal Unemployment, $0; Social Security, $850; and Medicare, $850 C) State Unemployment, $950; Federal Unemployment, $950; Social Security, $950; and Medicare, $950 D) State Unemployment, $200; Federal Unemployment, $200; Social Security, $950; and Medicare, $950 E) None of these

D) State Unemployment, $200; Federal Unemployment, $200; Social Security, $950; and Medicare, $950