Which of the following is not part of the records employers keep in employee files?
a. Regular rate of pay
b. Gender
c. Wages subject to tax for the calendar year
d. Health care account withdrawals
e. None of the above.
When the federal tax deposit is made, the employees’ and employer’s shares of FICA
taxes are paid along with the employees’ FIT taxes withheld.
a. True
b. False
Which of the following payments are taxable payments for federal unemployment tax?
a. Christmas gifts, excluding noncash gifts of nominal value
b. Caddy fees
c. Courtesy discounts to employees and their families
d. Workers’ compensation payments
e. Value of meals and lodging furnished employees for the convenience of the employer
If an employer is unable to obtain a certificate of age or a work permit for a minor
employee, the employer may rely upon what document as evidence of age?
a. Baptism record
b. Mother’s statement as to date of birth
c. High school enrollment form showing date of birth
d. Minor employee’s statement as to date of birth
e. None of the above
If the third decimal place is less than 5, drop the third decimal place.
Also, use the minimum hourly wage of $7.25 in solving these problems and all that
follow.
Refer to Instruction 31. On August 1, Huff (parttime waitress) reported on Form 4070
the cash tips of $158.50 that she received in July. During August, Huff was paid wages
of $550 by her employer. Determine:
OASDIHI
a)The amount of social security taxes that the employer should withhold from Huff’s
wages during August:__________
__________
b)The amount of the employer’s social security taxes on Huff’s wages and tips during
August:____________________
Employers who fail to file employment tax returns are subject to both civil and criminal
penalties.
a. True
b. False
Public safety employees of a state can be granted compensatory time off in lieu of
overtime compensation.
a. True
b. False
Form I9 must be completed by each new hire.
a. True
b. False
Partnerships do not have to pay unemployment taxes on the wages of their employees.
a. True
b. False
Services performed by a child under the age of 21 for a parentemployer are excluded
from FUTA coverage.
a. True
b. False
Employers not subject to Title VII coverage may come within the scope of the Civil
Rights Act by reason of a contract or subcontract involving federal funds.
a. True
b. False
FUTA Taxes Payable is an expense account in which are recorded the employer’s
federal unemployment taxes.
a. True
b. False
Instruction 51
Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages.
Refer to Instruction 51. John Gercke is an employee of The Woolson Company.
During the first part of the year, he earned $6,800 while working in State A. For the
remainder of the year, the company transferred him to State B where he earned $16,500.
The Woolson Company’s tax rate in State A is 4.2%, and in State B it is 3.15% on the
first $7,000. Assuming that reciprocal arrangements exist between the two states,
determine the SUTA tax that the company paid to:
a)State A __________.
b)State B __________.
An exception to the protection that the Age Discrimination in Employment Act provides
for all workers over 40 involves executives who are 65 or older and who have held high
policymaking positions during the twoyear period prior to retirement.
a. True
b. False
Which of the following is not an expense of the employer?
a. FUTA tax
b. FICA tax—HI
c. FICA tax—OASDI
d. SUTA tax
e. Union dues withheld
There is no limit to the amount of educational assistance that is exempt from federal
income tax withholdings.
a. True
b. False
OASDI taxes are levied when the wages are earned by, rather than when paid to,
employees.
a. True
b. False
If the third decimal place is less than 5, drop the third decimal place.
Also, use the minimum hourly wage of $7.25 in solving these problems and all that
follow.
Refer to Instruction 31. Crow earned $585.15 during the week ended March 1, 20.
Prior to payday, Crow had cumulative gross earnings of $4,733.20.
a)The amount of OASDI taxes to withhold from Crow’s pay is __________.
b)The amount of HI taxes to withhold from Crow’s pay is __________.
If an employer’s quarterly tax liability is $525, it must be paid on or before the last day
of the month following the end of the quarter.
a. True
b. False
If an employer is subject to a credit reduction because of Title XII advances, the penalty
for the entire year will be paid only with the deposit for the last quarter of the year.
a. True
b. False
Which of the following acts deals with the minimum wage paid to laborers for
contractors on federal government construction contracts?
a. WalshHealey Public Contracts Act
b. Fair Labor Standards Act
c. McNamaraO’Hara Service Contract Act
d. Occupational Safety and Health Act
e. DavisBacon Act
An employee submits an invalid Form W4 to the employer and does not replace it with
a valid form. The employer should withhold federal income taxes at the rate for a single
person claiming no exemptions.
a. True
b. False
Which of the following accounts is an expense account in which an employer records
the FICA, FUTA, and SUTA taxes?
a. Wages Expense
b. Payroll Taxes
c. SUTA Taxes Payable
d. Salaries Payable
e. None of the above
In some states, employers may obtain reduced unemployment compensation rates by
making voluntary contributions to the state fund.
a. True
b. False
Under ERISA, vesting conveys to employees the right to share in a retirement fund in
the event they are terminated before the normal retirement age.
a. True
b. False
Since vacation time is paid when used, there is no need to accrue this time in a liability
account at the end of each accounting period.
a. True
b. False
Under individual employee coverage, the worker is covered by the FLSA if:
a. the worker produces goods for interstate commerce.
b. the worker is a housekeeper in a private home for 16 hours a week.
c. the domestic receives cash wages of at least $2,000 from the employer in the calendar
year.
d. all of the above.
e. none of the above.
Employers can exempt the following from the provision of the Family and Medical
Leave Act:
a. All salaried employees
b. Employees with less than a five year tenure with the employer
c. All employees under the age of 30
d. All employees earning the minumum wage
e. Highestpaid 10 percent of their workforce
Which of the following is not required by the FLSA?
a. Extra pay for work on holidays
b. Two weeks’ vacation pay after one year of service
c. Restriction on hours worked by a 17yearold worker
d. All of the above are required.
e. None of the above is required.
Under the Civil Rights Act of 1964, the U.S. government is classified as an exempt
employer.
a. True
b. False
Instruction 31
Use the following tax rates, ceiling and maximum taxes:
Employee and Employer OASDI: 6.20% $127,200 $7,886.40
Employee and Employer HI: 1.45% No limit No maximum
Selfemployed OASDI: 12.4% $127,200 $15,772.80
Selfemployed HI: 2.9% No limit No maximum
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Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to
selfemployed.
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Exhibit 41:
Use the following tables to calculate your answers.
Refer to Exhibit 41. Calculate the amount to withhold from the following employees
using the biweekly table of the percentage method.
Kenneth Karcher (single, 1 allowance = $155.80), $895 wages__________
Mary Kenny (married, 2 allowances = $311.60), $1,900 wages__________
Thomas Carney (single, 0 allowances), $1,460 wages__________
Exhibit 41:
Use the following tables to calculate your answers.
Refer to Exhibit 41. Carson Smart is paid $1,200 every two weeks plus a taxable
lodging allowance of $100. He is a participant in the company 401(k) plan and has
$150 deducted from his pay for his contribution to the plan. He is married with two
allowances. How much would be deducted from his pay for federal income tax (using
the wagebracket table)?
Exhibit 61
The totals from the first payroll of the year are shown below.
Total
EarningsFICA
OASDIFICA
HIFIT
W/HState
TaxUnion
DuesNet
Pay
$36,195.10 $2,244.10 $524.83$6,515.00$361.95$500.00$26,049.22
Refer to Exhibit 61. Journalize the entry to record the payroll.
Exhibit 61
The totals from the first payroll of the year are shown below.
Total
EarningsFICA
OASDIFICA
HIFIT
W/HState
TaxUnion
DuesNet
Pay
$36,195.10 $2,244.10 $524.83$6,515.00$361.95$500.00$26,049.22
Refer to Exhibit 61. Journalize the entry to deposit the FICA and FIT taxes.
Instruction 31
Use the following tax rates, ceiling and maximum taxes:
Employee and Employer OASDI: 6.20% $127,200 $7,886.40
Employee and Employer HI: 1.45% No limit No maximum
Selfemployed OASDI: 12.4% $127,200 $15,772.80
Selfemployed HI: 2.9% No limit No maximum
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Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to
selfemployed.
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