Question

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7) Hank eams $24.00 per hour with time-and-a-half for hours in excess of 40 per week. He 50 hours at hisjab during the first week of March 2018. Hark pays income taxes at 15% a 0,1 for OASDI and Medicare. All of his income is taxable under FICA. Determine Hank's net and 766% the week. (Do not round any intermediate calculations, and round your final answer to the neare cent.) A) $1122.00 B) $799.80 C) $1021.0 D) $835.80 8) Which of the following taxes has a ceiling on the amount of annual earnings subject to tax? A) FICA-Medicare taxes C) sales tax B) federal income tax D) FICA-OASDI taxes 9) Tim's gross pay for this month is $8950. His gross year-to-date pay, prior to this month, totaled 111,500. What is the amount of FICA tax withheld from Tim's pay for this month? (Assume an OASDI rate of 62%, applicable on the first $118,500 earnings, and a Medicare rate of 1.45%, applicable on all earnings. Do not round any intermediate calculations, and round your final answer to the nearest cent.) A) $563.78 B) $554.90 C) $434.00 D) $129.78 10) Which of the following is paid by the employer only? 10) A) OASDI tax C) Medicare tax B) employee income tax D) federal unemployment tax 11) It is mandatory for both the employer and employee to pay A) SUTA C) FICA B) federal unemployment tax D) employee income tax 12) Tan's gross pay for the week is $1500. His year-to-date pay is under the limit for OASDL. Assume 12) that the rate for state and federal unemployment compensation taxes is 6% and that Tan's year-to-date pay has previously exceeded the $7000 cap. What is the amount of state and federal unemployment tax that his employer must record as payroll tax expense and pay to the federal and state governments? A) $111.75 B) $90 C) $21.75 D) so 13) Jack's gross pay for the week is $1400. His year-to-date pay is under the limit for OASDL Assume 13) that the rate for state and federal unemployment compensation taxes is 6% and that Jack's that Jack's employer must record as payroll tax expenses? (Do not round your intermediate calculations. Assume a FICA-OASDI Tax of 62% and FICA-Medicare Tax of 1.45%) A) $86.80 B) $20.30 C) $107.10 D) $58.80 14) The matching principle requires businesses to report Warranty Expense 14) A) in the period prior to which the company records the revenue related to that warranty B) in the long-term assets section of the balance sheet C) in the period after the related revenue is recorded D) in the same period that the company records the revenue related to that warranty 15) Which of the following accounting principles requires that warranty expense must be and recognized in the same period when the related sales revenue is recognized? must be estimated 15) A) the matching principle C) the revenue principle B) the consistency principle D) the disclosure principle

Answer 1

7	Option C is the correct answer
	Gross pay	1320	=(40*24)+(10*24*1.5)
	Deductions:
	Income tax	198	=1320*15%
	OASDI and Medicare	100.98	=1320*7.65%
	Total Deductions	298.98
	Net pay	1021.02
8	Option D is the correct answer
	The OASDI/Employee ceiling is set at $118,500.
9	Option A is the correct answer
	FICA
		OASDI	Medicare
	Earnings subject to tax	118500	No Max
	Less: Earnings prior to current month	111500	-
	Current pay subject to tax	7000	8950
	Tax rate	6.20%	1.45%
	Tax to be withheld from pay check	434	129.775
	Total FICA withheld	563.78
10	Option D is the correct answer
	The Federal Unemployment Tax Act (FUTA) is the federal fund to which all employers must pay a tax rate of 6.2% on $7000 each employee earns