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Exam 10: Current Liabilities and Payroll

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Question 91

Multiple Choice

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

A) hours worked
B) medicare tax rate
C) rate of pay
D) social security number

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

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Question 92

Multiple Choice

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Zennia Company provides its employees with varying amount of vacation per year, depending on the length of employment. The estimated amount of the current year's vacation cost is $135,000. The journal entry to record the adjusting entry required on December 31, the end of the current year, to record the current month's accrued vacation pay is

A) $135,000
B) $67,500
C) $0
D) $11,250

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

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Question 93

Multiple Choice

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An employee receives an hourly rate of $15, with time and a half for all hours worked in excess of 40 during the week. Payroll data for the current week are as follows: hours worked, 48; federal income tax withheld, $120; cumulative earnings for the year prior to this week, $24,500; Social security tax rate, 6% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings; state unemployment compensation tax, 3.4% on the first $7,000; federal unemployment compensation tax, .8% on the first $7,000. What is the net amount to be paid to the employee?

Excel Products Inc. pays its employees semimonthly. The summary of the payroll for December 31, 2012 indicated the following:

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

The journal entry a company uses to record the estimated accrued product warranty liability is

Payroll taxes levied against employees become liabilities

The total net pay for a period is determined from the payroll register.

According to a summary of the payroll of Scotland Company, $450,000 was subject to the 7.0% 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 accrued salaries would include:

An unfunded pension liability is reported on the balance sheet as

Darius Company has the following information for the pay period of January 15 - 31, 20xx. Assuming no employees are subject to ceilings for their earnings, calculate Salaries Payable and Employer Payroll Taxes Payable.

Which of the following is not an internal control procedure for payroll?

The following totals for the month of June were taken from the payroll register of Young Company: The entry to record the accrual of employer's payroll taxes would include a

Assuming a 360-day year, proceeds of $48,750 were received from discounting a $50,000, 90-day note at a bank. The discount rate used by the bank in computing the proceeds was