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Exam 9: Reporting and Analyzing Current Liabilities

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Question 81

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Gross pay is:

A) Take-home pay.
B) Total compensation earned by an employee before any deductions.
C) Salaries after taxes are deducted.
D) Deductions withheld by an employer.
E) The amount of the paycheck.

F) B) and C)
G) A) and C)

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Question 82

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Employer __________________ are an added employee expense beyond the wages and salaries earned by the employees.

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Question 83

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Deposits of amounts payable to the federal government may be paid through federal depository banks.

The employer should record deductions from employee pay as:

Zephyr Company's salaried employees earn four weeks of vacation per year. It pays $1,075,200 in total employee salaries for 52 weeks but its employees work only 48 weeks. The amount Zephyr should record as its weekly vacation expense is (round to the nearest whole dollar) :

A company cannot have a liability if the amount of the obligation is unknown.

Times interest earned is calculated by:

If a company has advance subscription sales totaling $45,000 for four quarterly journals that will mailed to customers in the upcoming year, the receipt of cash would be journalized as:

Times interest earned is computed by dividing income before interest expense and income taxes by _______________________.

The wage bracket withholding table is used to:

Each employee records the number of withholding allowances claimed on the withholding allowance certificate that is filed with the employer, which is the form W-4.

A company has a selling price of $1,800 each for its printers. Each printer has a 2 year warranty that covers replacement of defective parts. It is estimated that 2% of all printers sold will be returned under the warranty at an average cost of $150 each. During November, the company sold 30,000 printers, and 400 printers were serviced under the warranty at a total cost of $55,000. The balance in the Estimated Warranty Liability account at November 1 was $29,000. What is the company's warranty expense for the month of November?

Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of $8,260. The FICA tax for social security is 6.2% of the first $118,500 of employee earnings each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The FUTA tax rate of .6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee's pay. The amount of federal income tax withheld from her earnings was $1,325.17. Her net pay for the month is:

Short-term notes payable:

The state unemployment tax rates applied to an employer are adjusted according to an employer's merit rating.

Early Co. offers its employees a bonus equal to 2% of the company's net income. The estimated pre-bonus net income for the year is expected to be $800,000. Prepare the general journal entry to record the estimated employee bonus plan expense.

Star Recreation receives $48,000 cash in advance ticket sales for 12 home games. Record the advance ticket sales on April 30. Record the revenue earned for the first home game played on August 14.

A high merit rating for state unemployment taxes means that an employer probably has high employee turnover or seasonal hiring.

When the number of withholding allowances claimed on Form W-4 increases, the amount of income tax withheld decreases.

The total compensation an employee earns including wages, salaries, commissions, bonuses, and any compensation earned before deductions such as taxes is called ___________________.