Payroll Taxes Levied Against Employees Become Liabilities

Payroll Taxes Levied Against Employees Become Liabilities

Payroll taxes levied confronting employees become liabilities

Delight Respond ALL. THANKS 🙂

x. Payroll taxes levied against employees become liabilities

A. when the payroll is paid to employees

B. at the end of an bookkeeping flow

C. the first of the following month

D. when information are entered in a payroll register

9. Assume that social security taxes are payable at a 6% charge per unit and Medicare taxes are payable at a 1.v% rate with no maximum earnings, and that federal and state unemployment bounty taxes total four.6% on the kickoff $vii,000 of earnings.  If an employee earns $ii,500 for the current week and the employee’s year-to-appointment earnings earlier this calendar week were $6,800, what is the full payroll taxes related to the current week?

A.$344.fifty

B. $187.50

C. $196.70

D. $9.20

8.McKay Company sells merchandise with a one-year warranty.  In Yr 1, sales consisted of 1,200 units.  It is estimated that warranty repairs will boilerplate $10 per unit sold, and 30% of the repairs will be made in Year ane and 70% in Year 2.  In the Year 1 income statement, McKay should show warranty expense of

A. $12,000

B. $3,600

C. $viii,400

D. $0

vii.The toll of a product warranty should be included as an expense in the

A. menses of the sale of the product

B. time to come catamenia when the cost of repairing the product is paid

C. future period when the product is repaired or replaced

D. period the cash is collected for a product sold on business relationship

6.Which of the following is the virtually desirable quick ratio?

A. 1.50

B. two.20

C. i.lxxx

D. 1.95

v.Thomas Martin receives an hourly wage charge per unit of $40, with fourth dimension and a half for all hours worked in backlog of 40 hours during a week.  Payroll data for the current week are equally follows: hours worked, 48; federal income taxation withheld, $350; social security tax rate, 6.0%; and Medicare revenue enhancement charge per unit, 1.5%.  What is the gross pay for Martin?

A. $one,730

B. $2,080

C. $449

D. $ane,581

4. The journal entry a visitor uses to tape partially funded pension rights for its salaried employees at the finish of the yr is

Read:   Accrued Expenses Are Ordinarily Reported on the Balance Sheet as

A, debit Pension Expense; credit Unfunded Pension Liability

B. debit Salary Expense; credit Cash

C. debit Pension Expense; credit Cash

D. debit Alimony Expense; credit Unfunded Pension Liability and Cash

three. Which of the post-obit is required to be withheld from employee’s gross pay?

A. both federal and land unemployment compensation taxes

B. only federal unemployment compensation taxation

C. just state unemployment compensation tax

D. only federal income tax

2. On June viii, Smith Technologies issued a $75,000, 6%, 140-twenty-four hour period notation payable to Johnson Visitor.  What is the due appointment of the note?

A. October 27

B. October 26

C. October 28

D. Oct 25

1. Taylor Depository financial institution lends Guarantee Visitor $150,000 on January 1.  Guarantee Company signs a $150,000, 8%, ix-calendar month note. The entry fabricated by Guarantee Company on January 1 to record the proceeds and issuance of the note is

A.

. Cash 162,000

    Interest Expense 12,000

    Notes Payable 150,000

B.

Cash 150,000

     Notes Payable 150,000

C.

. Notes Payable 120,000
Interest Payable 7,200
     Cash 120,000

    Involvement Expense seven,200

D.

Interest Expense 12,000
Cash 138,000

     Notes Payable 150,000

Answer

Concepts and reason

Payroll taxes are the taxes to be paid on the salaries of the employees. Payroll taxes comprises of 2 components:

• Federal Insurance Contributions Act

• Medicare Federal Insurance Contributions Human action

Payroll taxes are the major revenue generating source of the government. Payroll taxes are used by the authorities for various Social and Medicare programs.

Warranty expense is the expense that is recognized based on repairs toll that will exist required to honour a warranty on a product sold. Warranty expense is taken in the income argument based on the warranty toll and the quantity of product sold.

Fundamentals

• Payroll tax’s incidence is divided betwixt the employer and the employee in equal proportions. Half of the payroll taxes are deposited by the employer and the other half are deducted from the employee’due south salary.

The rationale behind the payment of payroll taxes is that the current working generation of people should fund the Social Security and Medicare programs for the people who are currently retired and in the same way when the electric current workforce will retire, they will be paid for past the employees working that time.

Read:   Which of the Following is Not Classified as Direct Labor

It is the prime responsibleness of the employer to deposit the share of employee’s and as well as their ain contribution of payroll taxes, preparing diverse reconciliations and filing of payroll taxation returns.

• Warranty expense is recognized to account for the expense that might have to be occurred in instance of product being damaged or communicable a fault subsequently sale to the client. The estimated warranty repair cost to be incurred per product is estimated past the visitor and is multiplied with the number of products sold to find out the warranty expense to exist recorded in the books of business relationship.

Payroll taxes are deducted from the employee’s bacon at the time of payment of salary. Though as per accounting practice, it accrues at the fourth dimension of entering it in the payroll register, it becomes a liability for payment at the fourth dimension of payment of salary.

When an employee is paid his salary for the calendar month, the payroll taxes like Medicare and social security is computed and is paid to the authorities later deduction from the employee’south payroll.

Part 10

Payroll taxes levied against employees become liabilities when the payroll is paid to employees.

Payroll taxes are computed, deducted and paid when the payroll is paid to employees. The accounting principle implies accrual of payroll expense at the end of accounting menstruation. But as per taxation laws, the payroll tax is a liability when the payroll is paid to employees.

Summate the full payroll taxes related to electric current week equally follows:



Office 9

The total payroll taxes related to the current calendar week is $196.seventy.

Regardless of the level of earnings, social security taxes and Medicare taxes are payable at vi% and 1.5% respectively. In example of federal and state unemployment compensation taxes, revenue enhancement is imposed on first $7,000. $six,800 is already earned by employee year-to-date. $2,500 is earned in the electric current week.

Hence, only
is taxable in the current week as merely this amount is attributable towards the current week’due south earnings on which federal and state unemployment compensation taxes are to exist imposed.

Read:   All of the Following Are Payroll Liabilities Except:

Calculate the warranty expense for Yr 1 equally follows:


(Quantity sold x repairs percentage in Year 1)
Warranty expense for Year 1 =
x repairs cost per unit
= 1,200 units x 30% x $1

Function 8

In the Year 1 income statement, M company should evidence warranty expense of $3,600.

Full quantity sold in Year i is 1,200 units. The repair cost of each unit sold amounts to $10 and thirty% of the repairs every bit per warranty are to be fabricated in the outset year of buy. xxx% of 1,200 units, that is, 360 units are repaired at the cost of $10 per unit. Therefore, the warranty expense in Twelvemonth i in the income statement is
.

Part 10

Payroll taxes levied confronting employees become liabilities when the payroll is paid to employees.

Part 9

The total payroll taxes related to the electric current week is $196.70.

Part eight

In the Year 1 income argument, Grand company should evidence warranty expense of $three,600.

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Payroll Taxes Levied Against Employees Become Liabilities

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