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Question(s) / Instruction(s):

101)  a.  Compute gross pay for the following individuals assuming time in excess of 40 hours is paid at the rate of one and one-half of regular pay.

Employee            Hours Worked   Pay Rate Per Hour

Juanita Jones     50           $26

Maria Smith        44           $30

Lisa Rojas             46           $20

b.            All employees are subject to a rate of 8% FICA tax, 25% federal income tax, and union dues of $20 per week. Federal unemployment taxes are levied at a rate of .8% and state unemployment taxes are levied at a rate of 5.4%. No employee has earned more than $7,000, including this week's earnings. Determine the total net pay for all employees combined.


103)       The current portion of a long-term debt is the amount of the principal that is payable within one year.  

a)            True 

b)            False 



104)       A note to the financial statements is required when it is reasonably possible that a contingent liability will become an actual loss.  

a)            True

b)            False 



105)       Net pay equals gross pay minus income taxes and unemployment taxes.  

a)            True

b)            False 



106)       Required payroll deductions include insurance premiums and charitable contributions. 

a)            True

b)            False 



107)       Adequate internal control for the payroll function would require that a system such as a time clock be in place to assure that employees are paid only for hours actually worked.  

a)            True

b)            False 



108)       Which of the following is a cash advance received for services to be performed in the future?  

a.            Accounts payable  

b.            Estimated warranty payable  

c.             Accrued expense  

d.            Unearned revenue  



109)       In which of the following periods should the estimated warranty liability be debited?  

a.            The period when cash is paid to repair or replace the product  

b.            The period when the product is sold  

c.             The period when cash is collected for the sale of the product  

d.            The period when the product is repaired or replaced  



110)       Which of the following are pay amounts stated at an hourly rate?  

a.            Bonuses  

b.            Commissions  

c.             Wages  

d.            Benefits  



111)       On December 31 of this year, a company purchases a building by paying $50,000 and executing a mortgage payable of $450,000. The mortgage is payable in 10 equal principle payments, plus interest, at the end of each of the next 10 years. How will the mortgage be reported on the December 31 balance sheet at the end of the first year?  

a.            Current liability of $450,000  

b.            Current liability of $90,000 and long-term liability of $360,000  

c.             Current liability of $45,000 and long-term liability of $405,000  

d.            Long-term liability of $450,000  


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