Accounting Chapter 8 The Employer Pays The Same Amount The

9) The employer records deductions from the employee’s paycheck:

A) as debits to expense accounts.

B) as credits to liability accounts until paid.

C) as debits to asset accounts until paid.

D) as debits to the cash account.

10) The form used for the annual federal unemployment taxes is Form 941.

11) Form 941 taxes include OASDI, Medicare, and federal unemployment tax.

12) The same deposit rules apply to employers based on the amount collected and owed by that employer

for payroll taxes.

13) Businesses will make their payroll tax deposits based on payroll taxes collected.

14) Why are the employee deductions recorded as payables on the employer’s books?

15) Why are all of the employer payroll taxes listed in separate payable accounts?

16) Compute the total regular earnings.

17) Compute the total overtime earnings.

18) Compute the total gross earnings.

19) Compute the employees’ FICA-OASDI.

20) Compute the employees’ FICA-Medicare.

21) Compute the total federal income tax.

22) Compute the total state income tax.

23) Compute the employer’s payroll taxes.

24) Compute the total deductions for the employees’ paychecks.

25) Compute the net pay for the employees’ paychecks.

26) Prepare the general journal entry to record the payroll.

___________________________________________ _________ _________

27) Prepare the general journal entry to record the employer’s payroll tax expense.

___________________________________________ _________ _________

8.3 Learning Objective 8-3

1) FUTA taxes are paid:

A) by the end of January of the following year if the amount owed is less than $500.

B) by the end of the month following the end of the calendar quarter if the amount owed is more than

$500.

C) at the same time as the Form 941 taxes.

D) Both A and B are correct.

2) The correct journal entry to record the payment of FUTA is to:

A) debit Cash; credit FUTA Payable.

B) debit FUTA Expense; credit Cash.

C) debit FUTA Payable; credit Cash.

D) debit Cash; credit FUTA Expense.

3) The correct journal entry to record the payment of SUTA is:

A) debit SUTA Expense; credit Cash.

B) debit Cash; credit SUTA Expense.

C) debit Cash; credit SUTA Payable.

D) debit SUTA Payable; credit Cash.

4) The employer’s annual Federal Unemployment Tax Return is:

A) Form 940.

B) Form 941.

C) Form W-6.

D) Form 8109.

5) How often is a Form 940 filed?

A) Monthly

B) Annually

C) Weekly

D) Quarterly

6) Which of the following does NOT apply to both a W-2 and a W-3?

A) Reports the total amount of wages, tips and compensation paid to the employee

B) Reports the total OASDI and Medicare taxes withheld

C) Sent to the Social Security Administration

D) Employees use both forms to prepare their personal tax returns.

7) Which form contains information about gross earnings and is given to the employee by January 31?

A) Form W-2

B) Form W-3

C) Form 941

D) Form W-4E

8) Which form is sent to the Social Security Administration along with the W-2s? It reports total wages,

FICA tax withheld, etc., for the previous year.

A) Form W-2

B) Form W-3

C) Form SS-4

D) Form 940

9) If an employer owes less than $2,500 for FICA (OASDI and Medicare) and FIT, they can submit:

A) Form 941.

B) Form 940.

C) Form W-2.

D) Form W-3.

10) Grammy’s Bakery had the following information for the pay period ending June 30:

Employee

Name Pay

rate Hours

worked Cumulative

earnings Department Federal

income tax

withheld

P. Ganes $2,100 Salaried $12,500 Kitchen $86.00

T. Baker 16/hr 50 6,500 Office 22.00

Assume:

FICA-OASDI applied to the first $128,400 at a rate of 6.2%.

FICA-Medicare applied at a rate of 1.45%.

FUTA applied to the first $7,000 at a rate of 0.8%.

SUTA applied to the first $7,000 at a rate of 5.6%.

State income tax is 3.8%.

Given the above information, what would be the amount applied to FUTA Payable? (Round intermediary

calculations to the nearest cent and final answers to the whole dollar.)

A) Debit $4

B) Credit $4

C) Debit $23

D) Credit $23

11) The following amounts are an expense to the company:

A) FICA-OASDI Payable.

B) FUTA Payable.

C) SUTA Payable.

D) All of the above are correct.

12) The employer pays the same amount as the employee for Federal Unemployment taxes.

13) Information to prepare W-2 forms can be obtained from the current payroll register.

14) The W-2 is the Wage and Tax Statement.

15) A deposit must be made when filing the W-2 form.

16) Tax form 940 is filed annually.

17) Form 940 is used by businesses that employ workers in multiple states.

18) Employees must receive W-3s by January 31 of the following year.

19) The individual employee earnings for all employees in a company are summarized on the W-3 form.

20) The W-3 is also known as the Transmittal of Wage and Tax Statements.

21) The W-3 is filed only for odd years.

22) Both employer and employee contribute to FICA-OASDI and SUTA tax.

23) S. Paul, an employee of Plum Hollow Country Club, earned $1,100 during the first week of January.

His withholding included: federal income tax, 15%; state income tax, 5%; FICA-OASDI, 6.2%; FICA–

Medicare, 1.45%; and union dues $25. Determine the tax for OASDI, Medicare, Federal Income Tax, and

State Income Tax.

Ben’s Mentoring had the following information for the pay period ending September 30:

Employee Name Pay Hours Cumulative Department Federal income

rate worked earnings tax withheld

T. Sharp $5,000 Salaried $103,000 Office $ 2,100.00

V. Chandler 12.00 48 51,000 Tutor 215.00

M. Hill 13.00 43 5,200 Tutor 208.00

Assume:

FICA-OASDI applied to the first $128,400 at a rate of 6.2%.

FICA-Medicare applied at a rate of 1.45%.

FUTA applied to the first $7,000 at a rate of 0.8%.

SUTA applied to the first $7,000 at a rate of 5.6%.

State income tax is 3.8%.

Employees contribute to their retirement fund at a rate of 5.5% of their gross earnings.

24) Compute the total regular earnings.

25) Compute the total overtime earnings.

26) Compute the total gross earnings for the tutors.

27) Compute the total gross earnings for the office.

28) Compute the employees’ FICA-OASDI.

29) Compute the employees’ FICA-Medicare.

30) Compute the total federal income tax.

31) Compute the total state income tax.

32) Compute the total retirement.

33) Compute the total employer’s payroll tax.

34) Compute the total deductions.

35) Compute the net pay.

36) Prepare the general journal entry to record the payroll.

___________________________________________ _________ _________

37) Prepare the general journal entry to record the employer’s payroll tax expense.

___________________________________________ _________ _________

38) Prepare the general journal entry to record the payment of the employees.

___________________________________________ _________ _________

39) Prepare the general journal entry to record the payment to the Federal Treasury.

___________________________________________ _________ _________

40) Prepare the general journal entry to record the payment of the retirement fund withholdings.

___________________________________________ _________ _________

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2

the normal balance for the account, in Column 3 the financial statement on which the account balance is

reported, and in Column 4 the nature of the account (permanent/temporary).

41)