7 3 learning objective 7 3 1 bob 39 s auction house 39 s payroll for june includes t 4303304

 

7.3   Learning Objective 7-3

1) Bob's Auction House's payroll for June includes the following data:

 

Gross earnings	$4,000
Salaries subject to FICA:
6.2% OASDI	2,800
1.45% Medicare	4,000
Salaries subject to unemployment:
0.8% FUTA	2,000
2.0% SUTA	2,000
Other deductions include:
Federal income tax	700
State income tax	500

 

What is the net pay?

A) $2,568.40

B) $1,942.40

C) $3,000.00

D) $2,798.40

2) Workers' Compensation Insurance is:

A) paid by the employer to protect the employee against job-related injury or death.

B) paid by the employee to protect himself/herself against job-related accidents or death.

C) paid by the employer to protect the employee against non-job-related injury or death.

D) paid by the employee to protect himself/herself against non-job-related accidents and death.

3) Which tax does not have a wage base limit?

A) State unemployment tax

B) Federal unemployment tax

C) FICA-Medicare

D) FICA-OASDI

4) Prepaid Worker's Compensation Insurance is what type of account?

A) Asset

B) Expense

C) Liability

D) Contra-asset

5) Bob's Auction House's payroll for June includes the following data:

 

Gross earnings	$3,200
Salaries subject to FICA:
6.2% OASDI	2,500
1.45% Medicare	3,000
Salaries subject to unemployment:
0.8% FUTA	2,000
2.0% SUTA	2,000
Other deductions include:
Federal income tax	500
State income tax	300

 

What is the gross pay?

A) $1,998.40

B) $1,942.40

C) $3,200.00

D) $2,798.40

6) Compute the net pay for each employee listed below. Assume the following rates: FICA-OASDI 6.2% on a limit of $117,000; Medicare is 1.45%; federal income tax is 20%; state income tax is 5%; and union dues are $10.

 

Cumulative PayThis Week's Pay

Jerry Bird$105,000$5,000

Jean Read60,0003,000