1. Mobile Co. issued a $45,000, 60-day, discounted note to Guarantee
Bank. The discount rate is 6%. At maturity, the borrower will pay:
2. Which of the following forms is typically given to employees at the
end of the calendar year so that employees can file their individual
income tax forms?
a. Employment Withholding Allowance Certificate (W-4)
b. Wage and Tax Statement (Form W-2)
c. Employer's Quarterly Federal Tax Return (Form 941)
d. 401k plans
3. 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, 46; federal income tax
withheld, $120; cumulative earnings for the year prior to this week,
$5,500; 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 employer's
payroll tax expense?
4. For a current liability to exist, the following two tests must be
met. The liability must be due usually within a year and must be paid
out of current assets.
5. Internal controls for cash payments also apply to payrolls.
6. During the first year of operations, employees earned vacation pay
of $35,000. The vacations will be taken during the second year. The
vacation pay expense should be recorded in the second year as the
vacations are taken by the employees.
7. Partner A has a capital balance of $20,000 and devotes full time to
the partnership. Partner B has a capital balance of $30,000 and
devotes half time to the partnership. In what ratio is net income to
8. Xavier and Yolanda have original investments of $50,000 and $100,000
respectively in a partnership. The articles of partnership include the
following provisions regarding the division of net income: interest on
original investment at 10%, salary allowances of $27,000 and $18,000
respectively, and the remainder equally. How much of the net loss of
$6,000 is allocated to Yolanda?