Payroll Accounting 2024 10th International Edition Jeanette Landin, Paulette Schirmer - Solutions

LO 5-6 The owner of All Grains Bakery is considering offering additional payroll disbursal methods for the employees. Which of the following would be the safest for employees without a bank account?a. Checkb. Paycardc. Cashd. Direct deposit
LO 5-3 What is the Social Security wage base for 2023?a. $128,400b. $142,800c. $147,000d. $160,200
LO 5-3 Under which circumstances could the percentage method be used to determine federal income tax withholding amounts? (Select all that apply.)a. When the employee’s taxable income exceeds the maximum amount on the appropriate wage-bracket tableb. When using a computerized accounting system to
LO 5-2 A new employee at Financial Technologies, Ltd. is married with children, and the spouse works. What items need to be considered for appropriate Form W-4 completion? (Select all that apply.)a. Children’s agesb. Tax filing statusc. Spouse’s incomed. Spouse’s birthdate
LO 5-1 The owner of Padua Products wants to reward the employees for their work during the year and has asked you to gross-up their bonuses so that they receive the full amount as net pay. What amount(s) should you consider when computing the grossed-up pay? (Select all that apply.)a. Desired bonus
16. How does cryptocurrency function as a payroll payment method?
15. Why are union dues not considered a garnishment?
14. Why are garnishments deducted on a post-tax basis?
13. What are two examples of garnishments?
12. When should the percentage method be used instead of the wage-bracket method?
11. How does the percentage method work using Form W-4 information?
10. What are an advantage and a disadvantage of direct deposit?
9. What are an advantage and a disadvantage of paycards?
8. What are two of the five different payment methods?
6. How is an employee’s net income computed?
5. Name four states that do not have an employee income tax.
4. How is Medicare tax computed? What is the maximum wage base?
4. What type of payments may be made to employees through cryptocurrencies?
3. For which pay method(s) must an employee have a bank account?
2. What regulation governs paycard loss or theft?
1. What are the different employee pay methods?
2. An electrician who is a member of the IBEW union asks you, the payroll accountant, if they may pay the union dues with a personal check instead of a post-tax deduction. The IBEW requires that the employer remit collected dues. What advice would you offer the employee?
1. Which of the following is a debt that may be collected via wage garnishment?a. Student loansb. Child supportc. Debt to family membersd. Tax liense. Union duesf. Charitable contributions
2. Jodie works as an accountant in Denver, Colorado. Colorado has a state income tax of a flat 4.4 percent. Colorado’s OPT is $5.75 per month per employee. If Jodie is paid monthly and earns $2,850 after pre-tax deductions, what are the state and local taxes?
1. Ever works as a research scientist in Amasa, Michigan; earns $62,500 annually; is married filing jointly with no dependents (box 2 is not checked); and is paid biweekly. Ever has a pre-tax deduction of $150 for a 401(k) and $80 for qualified health insurance. Using the state tax listed in
3. Shae is the CEO of a company and earns $250,000 per year. The yearto-date salary for the 19th pay period of the year was $197,916.67. Shae is single, contributes 5 percent of gross pay to 401(k), and has a qualified Section 125 deduction of $75 per semimonthly pay period.a. For the 20th pay
2. For Peyton’s FICA taxes, what is the total tax liability, including employee and employer share?
1. Peyton is an employee who earned $68,640 before the current pay period. The current gross pay for the period is $5,280. What amount must be withheld for Social Security tax? For Medicare tax?
3. How much would Asa’s federal income tax be if $75 health insurance and$55 AFLAC premiums were deducted each pay period pre-tax? (Use the wage-bracket method, independent of question 2.)
2. If Asa elected to deduct $100 per pay period for a 401(k), how much would that change the tax withheld from the paycheck? (Use the wagebracket method.)
1. Asa earns $75,000 annually, is married filing jointly with two dependents not under 17, a spouse that does not work (box 2 is not checked), and is paid semimonthly; the W-4 is from 2023. Calculate the amount to be withheld using (a) the wage-bracket method and (b) the percentage method.
3. What does it mean to “gross up” an amount paid to an employee?
2. What are three items that may be deducted from gross pay?
1. What is the difference between gross pay and net pay?
4-4. Want to know more about the topics discussed in this chapter? Go to the following links:www.healthcare.gov/law/index.html www.aflac.com www.investopedia.comwww.irs.gov/pub/irs-pdf/p15b.pdf www.dol.gov/general/topic/wages/garnishments
4-3. Go to Talking Benefits and search for benefits-related podcasts. Once you have listened to one or more podcasts, describe the insights you gained from the information presented.
4-2. Using a site such as Google, Yahoo, or Safari, search for the term “fringe benefits.”Sites such as Zywave and Employee Benefit Adviser contain insights into fringe benefits and guidance about the tax treatment for benefits. Why do you think that fringe benefits are important enough to
4-2. Rowan’s employer offers the option to use the cents-per-mile rule instead of the leasevalue rule for 2023. Which method will yield the lower gross income for Rowan? (Use 65.5 cents per mile in your calculations.)(1) Automobile FMV (2) Annual Lease $ 0 to 999 . . . . . . . . . . . . . . . . .
4-1. Rowan M. is a sales employee of Carefree Pools and Spas, Inc. In 2023, he was issued a company car with a fair market value of $35,000 and drove a total of 22,000 miles; used the car for 2,000 miles for personal use; and the employer paid for fuel, charging Rowan 5.5 cents per mile. Under the
LO 4-1, 4-2, 4-3, 4-5 Kit is reviewing benefits with you, the payroll accountant for Silly Lemon Films. Classify the following benefits as pre-tax or post-tax deductions and as taxable or tax-exempt for federal income tax.Benefits Benefit Pre-Tax Post-Tax Taxable Tax Exempt Medical insurance FSA
LO 4-6 Teagan is the payroll accountant for Penn & Associates Investments.The company decided on December 15, 2023, that it would invoke the special accounting rule. By what date does Teagan need to notify affected employees that the rule is being used?
LO 4-4 River, president of Miller Custom Coffee Roasters, drives a 2022 Mercedes E300 with a fair market value of $57,500. The lease value is$14,750. The odometer started at 655 and was reported at 32,855 at the end of the year. The car was available all of 2023. River reported driving 32,200 miles
LO 4-4 Shiloh is a sales representative for American Silk Mills who has a company car to visit customer sites. Shiloh drove 25,500 miles during 2023, of which 15 percent was reported as personal miles. Using the cents-per-mile rule, what is the valuation of this benefit for 2023?
LO 4-1,4-3 Lane is an employee in the office of Salvaggio & Wheelers, Attorneys at Law, who received the following benefits during 2023:• Medical insurance: $250 per month• Commuter pass: $500 per month• Employer-paid membership to Anytime Gym: $75 per year• Dependent care assistance:
LO 4-3 Windsor is employed at Rockstar Music. Windsor is receiving education assistance of $5,750 per year from Rockstar Music to complete a bachelor’s degree from an accredited college. How much of that assistance is taxable?
LO 4-1,4-2 Tate is a manager at Complex Ventures, Inc. Tate contributes $2,750 annually to an FSA and has medical insurance with a $500 monthly premium. Tate earns a salary of $72,200 and is paid biweekly. What is the taxable income per period?
LO 4-1,4-2 Robin is a new employee at Big Tech Computers and is debating whether to enroll in a POP with the opportunity for an FSA or an HDHP with an opportunity for an HSA. The POP premium is $550 per month and the annual deductible is $400. For the HDHP, the monthly premium is $175 and the
LO 4-6 To which two months does the special accounting rule pertain?a. January and Februaryb. November and Decemberc. The last two months of the company’s fiscal yeard. December and January of the following year
LO 4-5 Which of the following are always post-tax deductions? (Select all that apply.)a. Garnishmentsb. Qualified health insurancec. Charitable contributionsd. Retirement plan contributions
LO 4-1 Which of the following is/are examples of fringe benefits? (Select all that apply.)a. Education assistance (up to $5,250 annually)b. Dependent care assistance (up to $5,000 annually)c. Vacation packagesd. Retirement planning services
LO 4-5 Jamie is the payroll accountant of Central Communications and is researching retirement plan options for the employer. Central Communications has 135 employees and is a for-profit company. Which of the following plans should Jamie consider?a. IRAb. 457c. 403(b)d. 401(k)
LO 4-2 Casey is the payroll accountant for Glowing Yoga and is preparing a Section 125 cafeteria plan presentation. Which of the following items may qualify for inclusion in a cafeteria plan? (Select all that apply.)a. Health benefitsb. Adoption assistancec. Childcare expensesd. Education assistance
LO 4-4 Grey is an employee of Convergent Technologies whose job is strictly based in the company’s office. The employer has authorized the use of a company vehicle for commuting purposes as necessary. Which of the general valuation rules would be appropriate to evaluate the value of this fringe
LO 4-3 Marlow is an employee of All-Adventure Tours. All-Adventure Tours offers tuition reimbursement as a fringe benefit. What maximum amount may be excluded from Marlow’s taxes as a fringe benefit? (Select all that apply.)a. $4,750b. $5,000c. $5,250d. $5,750
LO 4-2 What is the annual maximum amount that an employee may contribute to a flexible savings arrangement before it becomes taxable income?a. $2,850b. $2,950c. $3,050d. $3,150
LO 4-2 Which of the following is a co-requisite of a health savings account (HSA)?a. No employer-provided insuranceb. A high-deductible health planc. Multiple health insurance plans held by the same employeed. A flexible spending arrangement
LO 4-1 Taylor is an employee of New York Boutiques, Inc., and is a traveling salesperson who routinely meets with customers at their places of business.Which of the following fringe benefits would be appropriate for the employer to provide for Taylor to conduct business? (Select all that apply.)a.
LO 4-1 Which of the following fringe benefits is exempt from federal income tax but subject to FICA tax?a. Moving expense reimbursementsb. Tuition reduction for undergraduate educationc. Adoption assistanced. Working condition benefits
LO 4-1, 4-2, 4-3, 4-5 Dallas is the payroll accountant at White Box Builders and is preparing an information package about voluntary and fringe benefits. Using the following list of fringe benefits, classify each benefit as pre-tax or post-tax and as taxable or tax-exempt for federal income
LO 4-6 Jesse is the payroll accountant for Comptech Industries which decided to use the special accounting rule for 2023. Which months may be included in the special accounting rule?
LO 4-1,4-2, 4-5 Shiloh is an employee at Jankoski Cycles and earns an annual salary of$37,765, paid semimonthly. Shiloh contributes to the following fringe benefits and other deductions:• Medical insurance: $220 per pay period• Dental insurance: $15 per pay period• 401(k): 6 percent of gross
LO 4-5 Marley is a supervisor at Fantastigifts and receives an annual salary of$45,000, paid biweekly, and a garnishment for consumer credit of $375.Assuming that the disposable income is 80 percent of the gross pay per period, does the garnishment follow the CCPA? If not, what is the maximum
LO 4-4 Blaine is the vice president of operations for Southern Sweets Bakery.Blaine drives a 2023 Toyota Prius as his company car, and it has a fair market value of $41,500. The vehicle’s prorated annual lease value per Publication 15-B is $10,750. Blaine reported driving 34,750 miles during
LO 4-4 Dana is an account representative at Ever Pharmaceuticals. Dana has a company car for customer visits and uses it to commute from work to home on Friday nights and from home to work on Monday mornings, 50 weeks per year. The commute is 25 miles in each direction. Using the commuting rule,
LO 4-1,4-3 Jona is an employee at Radiance Senior Living and received the following benefits from the employer during 2023 on the company’s location for company purposes:• Personal protective equipment: $50 per month• Employer-provided cell phone: $50 per month• Ten-year employee award:
LO 4-3 Kai is an employee of Dimensionworks Designs in New Mexico who received the following achievement awards from her employer during 2023:• Best safety plan, Santa Fe County: Set of golf clubs worth: $1,200• Top emergency plan layout, New Mexico: Television valued at: $1,600• Ten-year
LO 4-1,4-2 Addison is a graphic designer at a large marketing firm and earns$56,000 annually, paid biweekly. Addison contributes 5 percent of the gross pay to a qualified 401(k) plan on a pre-tax basis and has a pre-tax medical premium of $350. What is the taxable income per pay period?
LO 4-1 Emery is a computer programmer at Biosphere Communications. Emery has a garnishment for child support and would like to pay it personally and not have it automatically withdrawn from the gross pay. What advice should you offer Emery?
LO 4-1,4-2 Sargent is a new employee at Tet Torr Entertainment. The company has both a POP with the opportunity for an FSA or an HDHP with an opportunity for an HSA. The POP premium is $350 per month and the annual deductible is $500. For the HDHP, the monthly premium is $200 and the annual
LO 4-6 By what date must a company declare the value of noncash benefits used in 2023?a. January 1, 2024b. December 31, 2023c. February 1, 2024d. January 31, 2024
LO 4-5 How is disposable income computed?a. Gross pay less pre-tax deductionsb. Gross pay less pre-tax deductions and income taxesc. Gross pay less mandatory deductionsd. Gross pay less Social Security and Medicare taxes
LO 4-5 Which of the following is true about fringe benefits? (Select all that apply.)a. They represent additional cash paid directly to employees.b. They are only available for employees and their families.c. They represent additional compensation given for services performed.d. The amount of the
LO 4-5 Which of the following describes the primary difference between a 401(k)and a 403(b) retirement plan?a. The 401(k) is a defined benefit-only plan.b. The 403(b) is a defined contribution-only plan.c. The 401(k) is restricted to investments in stocks only.d. The 403(b) is restricted to use by
LO 4-4 Jace is an employee of Wilson In-Home Healthcare. Jace has a company vehicle to drive to customer sites. Which of the general valuation rules would be appropriate to compute the value of the asset for any personal use? (Select all that apply.)a. Cents-per-mile ruleb. Commuting rulec. Unsafe
LO 4-1 Silver is an employee who receives educational assistance from their employer in the amount of $15,000 per year. How is this amount treated for tax purposes?a. None of it is taxableb. All of it is taxablec. $5,250 is taxabled. $9,750 is taxable
LO 4-2 Gem is wondering what elements are in a qualified health plan. Which of the following would be included? (Select all that apply.)a. Mental health benefitsb. Prescription drugsc. Pet insurance premiumsd. Preventive and wellness services
LO 4-1 Dev is a metalworker at Bartleby’s Metal Shop. Which of the following would likely be fringe benefits that the employer would provide because they would be needed as part of this job? (Select all that apply.)a. Heat-resistant glovesb. On-site cafeteriac. Welding maskd. Personal accounting
LO 4-1, 4-4 Harper is a children’s photographer for Cool Cax Digital and would like advice about using an FSA for miscellaneous prescriptions and other medical expenses. What reason(s) would you give Harper for having an FSA account? (Select all that apply.)a. The monthly amount is deducted on a
15. How often must employers deposit taxes associated with taxable fringe benefits?
14. How does the special accounting rule affect the withholding of benefits?
13. How do post-tax deductions differ from pre-tax deductions?
12. What are garnishments, and how must they be handled?
11. What are the ways that the value of a company vehicle as a fringe benefit is determined?
10. What are three examples of excluded fringe benefits?
9. How does an FSA affect an employee’s taxable wages?
8. What are the four categories of cafeteria plans?
6. What are two examples of pre-tax deductions?
5. What are two examples of voluntary deductions?
4. What are the two reports associated with fringe benefits?
3. What are three examples of voluntary fringe benefits?
1. Why do companies offer fringe benefits to their employees?
3. Ali King is an employee of Nabors Drilling. When Form W-2 was distributed in January, Ali noticed that gross pay exceeded the annual salary. As the payroll accountant, you are aware of all fringe benefits available to and used by employees. What would you tell Ali to help explain the difference?
2. Braden McLaughlin is an employee of Creighton Steel and receives several fringe benefits due to his employment. He wants to know the value of his employment, both cash and noncash. What report should he request from his employer?
1. When should employers withhold amounts of money associated with benefits from employee pay?
4. The employee questioned the amount of the garnishment in question 3, claiming that the health insurance of $125 and union dues of $45 must also be withheld from their pay before calculating disposable pay. How much should be withheld for the garnishment? Explain.
3. An employee has disposable pay of $1,790.00 for this biweekly pay period.The payroll department receives a court-ordered garnishment for credit card debt of $15,000. What is the maximum amount that may be withheld from the employee’s pay?
2. What are examples of different retirement plans that may qualify as pre-tax withdrawals?
1. Which act offered a small-business tax credit for employees’ health insurance premiums?
2. Turner is a sales representative for a large pharmaceutical company. The company car is a 2022 Lexus ES, which has a fair market value of $47,000 and a lease value of $12,250. Turner has had the use of the vehicle for 180 days in 2023. Turner drove the vehicle 20 percent for personal use, and
1. Ian is a field service representative whose primary job function is to visit customer sites. The primary base for computing mileage is Ian’s home. In 2023, a total of 30,250 miles were driven in the company car, 15 percent of which was for personal use. Using the IRS standard mileage rate of

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Payroll Accounting 2024 10th International Edition Jeanette Landin, Paulette Schirmer - Solutions

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