Payroll Accounting 2017 3rd edition Jeanette Landin, Paulette Schirmer - Solutions

Maggie’s Memories is a semiweekly depositor. Following the success of a special project, Maggie, the owner, pays each of the 250 employees a $20,000 bonus on August 17, 2016. Assuming a 25% income tax rate, when will Maggie need to deposit the payroll taxes?
What are advantages and disadvantages of direct deposit?
Which of the following are always post-tax deductions?
What are advantages and disadvantages of paycards?
Which of the following is true about state and local income tax?A. Pre-tax deduction rutes for federal income tax are generally the same for state and local income taxes.B. Nine states do not have a personal income tax on earnings.C. All localities levy income taxes on employees.D. State income tax
Which of the following statements are true about state and local income taxes? (Select all that apply) A. All states tax employee earnings.B. State tax rates on employee earnings vary among statesC. Certain states have no personal income tax deductionD. Some localities levy income tax on
What are the four different pay methods?
Scout is the vice present for marketing at Sun Field Industries. She earns $140,000 annually and is paid on a semimonthly basis. As of October 31, Scout has year-to-date earnings of $116,666.67. The Social Security wage base is $118,500. What is the maximum amount of her taxable earnings that may
Which of the following are true about Social Security and Medicare tax deductions? A. They are applied to the gross pay.B. Contributions to a 401(k) plan are exempt from these taxes.C. Medicare taxes apply to all earnings.D. Certain pre-tax deductions are exempt from Social Security and
The employees of Black Cat Designs are paid on a semimonthly basis. Compute the FICA taxes for the employees for the November 30, 2016, payroll. All employees have been employed for the entire calendar year.
Which of the following is true about Social Security and Medicare taxes, as they pertain to earnings limits? (Select all that apply)A. Social Security tax applies to all earnings, regardless of year-to-date amounts.B. Employees who earn more than $200,000 annuaLly are subject to additionaL Medicare
Why is the difference between gross pay and taxable income important?
Which of the following are steps in computing federal income tax withholding using the percentage method?A. Compute and deduct withholding allowance.B. Apply the tax rate to the taxable portion of the earnings.C. Determine if the employee is exempt or nonexempt.D. Add the marginal tax.
Under which circumstances could the percentage method be used to determine federal income tax withholding amounts?
How is an employee’s net income computed?
Liam is the payroll accountant for Chop Brothers Coffee. As he prepares to use to wage bracket tables to determine federal income tax withholdings for each employee, which information should he have available?
Teddy is a new payroll clerk with B&H Farms. As he prepares to use the wage bracket tables to determine federal income tax withholdings, what information does he need for each employee?
What are two examples of pre-tax deductions?
Which of the following is/are examples of fringe benefits?A. Education assistanceB. Shopping club membershipC. Vacation discountsD. Retirement planning services
Which of the following is true about fringe benefits?A. They represent additional cash paid directly to employees.B. They are only available for employees.C. They represent additional compensation given for services performed.D. The amount of the fringe benefit is never subject to income tax.
What are two examples of voluntary deductions?
Gabrielle Jackson is the payroll accountant of Choice Bakeries. She is researching retirement plan options for her employer. Choice Bakeries has 77 employees and is a for-profit company. Which of the following plans should she consider?A. 403(b)B. 401(k)C. SIMPLE 401(k)D. IRA
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 stock only.D. The 403(b) is restricted to use by
Name four states that do not have an income tax for employees (Student answers may vary among the following list).
Cameron Levitt is the payroll accountant for Glowing Yoga. He is preparing a presentation about the Section 125 Cafeteria plans. Which of the following items may qualify for inclusion in a cafeteria plan?A. Health benefitsB. Adoption assistanceC. Childcare expensesD. Education assistance
Larisa is an employee of Yellow Rose Products. She has come to you, the payroll accountant, for advice about her health insurance premiums, specifically if she should have them deducted pre-tax or post-tax. What reason(s) would you give her for having the medical premiums deducted on a pre-tax
Joey Martel is an employee of Overclock Watches. His employer would like to give him a bonus and has asked you to gross it up to ensure that Joey receives the full amount of the desired award. Which of the following should be considered in the denominator to compute the grossed up amount? (Select
Daryl Simpson is the owner of Padua Products. During the holiday season, he wants to reward his employees for their work during the year, and he 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
How is Social Security tax computed? What is the maximum wage base?
Mandella, the payroll accountant, needs to compute net pay for the employees for Hay Industries. Place the following steps in the proper order.E. Determine gross payB. Subtract pre-tax deductions from gross payA. Compute income taxesC. Compute Social Security and Medicare taxesD. Subtract taxes and
When are wait time, travel time, and sleep time compensable?
Under what circumstances may an employee receive compensation for on-call time?
Colin is an 18-year-old worker in the receiving department of a company. On his first paycheck, he notices that he received $170.00 gross pay for 40 hours of work. Did his employer pay him correctly? Explain.
Why are companies moving toward the hundredth-hour system?
Olivia is a 19-year-old accounting clerk. During the first month of her employment with a firm, she noticed that she received $369.75 for her first semimonthly pay covering 87 regular hours. Did the employer pay her correctly? Explain.
Nadine is an administrative assistant for her employer. At the end of her shift one day, her employer requires her to deliver a package to a customer before travelling home. She spends 2 hours driving to the customer site, and then 3 hours driving home. How much of Nadine’s travel time is
What is the difference between quarter-hour and hundredth-hour pay?
Marshawn is a sales assistant for his employer whose normal commute time is 30 minutes each direction. At the beginning of his shift one day, his employer requires him to pick up a package from a customer before arriving at work. He spends 1 hour driving to the customer site, and then 1.5 hours
Eric Matte is a salaried, nonexempt administrative assistant for his company and is paid semimonthly. He is married with two withholding allowances. His annual salary is $39,000, and his standard workweek is 37.5 hours. During a pay period, he worked 10 hours overtime. Computer Eric€™s
John is the office manager for a small mortgage brokerage. Because it is a small office, he is required to keep track of all employee records and pay both employees and contractors. Which of the following are legal factors that will differentiate between exempt and nonexempt employees (select
Amanda M. worked the following schedule: Monday, 8 hours; Tuesday, 9 hours; Wednesday, 7 hours 48 minutes; Thursday, 8 hours; Friday, 8 hours. The employer pays overtime for all time worked in excess of 40 hours per week. Compute the following:Which pay is more favorable for Amanda, quarter-hour or
Nick B. worked the following schedule: Monday, 8 hours, 24 minutes; Tuesday, 7 hours, 44 minutes; Wednesday 9 hours, 8 minutes; Thursday, 8 hours, 2 minutes; Friday, 8 hours, 36 minutes. If his company pays for every minute, compute the following:Which pay is more favorable for Nick? Overtime
Elmira is a tipped employee in Hawaii. What is the minimum tipped wage for her area?
In what situations might an employee draw money against his or her future pay?
a. Rick is a waiter at Palace Eats in Delaware. He is single with 1 withholding allowance.He receives the standard tipped hourly wage.During the week ending October 20, 20XX, he worked 40hoursand he received $160 in tips. Calculate the following:b. How much does Palace Eats need to contribute to
What is the primary difference between commission work and piece-rate work?
In what situations could a salaried employee receive overtime pay?
Bill Smith works for NMH Industries. He is married with 2 withholding allowances and earns $18.55 per hour. During a biweekly pay period ending March 5, 20XX, he worked 78.5 hours. Complete the payroll register with the period's information.
Mareka, an outside sales representative for an insurance company, receives 3% commission on all new policies she receives in her sales territory. This week she sold $150,000 of new policies and worked 40 hours. a. What is her gross pay? b. Is she subject to minimum wage laws? c. Why
Of the following items listed, which ones should appear in a payroll register?1. Gross pay2. Hourly rate3. Period ending date4. Office number
Cathy, an outside sales representative for a magazine company, receives 10% commission on all new subscriptions she receives in her sales territory. This week she sold $5,000 of new subscriptions and worked 40 hours. 1. What is her gross pay?2. Is she subject to minimum wage laws? 3. Why
Of the items in the following list, which ones should appear in a payroll register?
Priscilla Stamper is a commission-based employee who is single with 1 withholding allowance. She is paid $16.50 per hour and receives commission on net sales. She does not receive commissions until her net sales exceed $5,500 during a weekly period at TLA Medicinals. Once the minimum sales volume
Leah is an account clerk who is paid $11.23 per hour. During a week's pay period, she worked 38 hours and 47 minutes. Based on a hundredth-hour pay method, what is her gross pay for the period?
Peggy is an employee of Yummy Cake Bakery. She is a cake decorator who is paid based on the number and complexity of the cakes she decorates. What pay basis most accurately describes her compensation?1. Hourly2. Commission3. Piece-rate4. Salary
Romeo works for a menswear retail store. His compensation is based on sales of store products to customers. Which type of pay basis represents Romeo's pay?1. Piece rate2. Hourly3. Commission4. Salary
Paris Johnson is a shared employee: She works in the accounting department and has been trained to work at the front desk in times of need. During other employees€™ vacations, she was asked to work at the front desk 4 days for 5 hours each day. When she works in the accounting department,
Kathryn is a waitress at a restaurant in South Carolina. She earns the tipped minimum wage. During a 40-hour work week, how much must she earn in tips to satisfy the minimum wage requirement?1. $85.202. $204.803. $290.004. $153.40
Aaron works for Pinecone Parasails. Aaron is a shared employee: He works in the manufacturing department and has been trained to work the sales counter in times of need. During other employees’ vacations, he was asked to work in the sales department 2 days for 6 hours each day. When he works in
Janet completed 1,200 pieces on her 1,400-piece contract for the company. There is a bonus earned if the individual exceeds 15% of her piece contract. How many pieces must Janetcomplete in the remainder of the week to receive the bonus?
Tessa completed 17 pieces on her 15-piece contract for the company. There is a bonus earned if the individual exceeds 2% of their piece contract. How many pieces must Tessa complete in the remainder of the week to receive the bonus?
Ryanne is a tipped employee in Idaho. What is the minimum tipped wage for her state?1. $213/hour2. $3.95/hour3. $3.75/hour4. $3.35/hour
How does minimum wage affect commission employees?
Brooke is a minimum-wage worker in South Dakota. She is contemplating moving to a state with a more favorable minimum wage. Which of the following states should she choose?
Certain types of businesses are always covered by FLSA provisions. Which of the following businesses are always covered by FLSA? (Select all that apply)1. Fruit stands selling only locally obtained goods that conduct no interstate business.2. A school for children with learning disabilities.3. A
Daniel owns Veiled Wonders, a firm that makes window treatments. Some merchandise is custom-made to customer specifications, and some is mass-produced in standardized measurements. He has production workers who work primarily on standardized blinds and some employees who additionally work on custom
Rose is a minimum wage worker in Missouri. She is contemplating a move to another state. Which of the following states would the most favorable in terms of the highest minimum wage?
West Virginia State University has a policy of hiring students to work in its bookstores and cafeterias. Assuming that 138 students work for the university at minimum wage rates, what is the amount of pay they will receive for a biweekly pay period, assuming they each work 30 hours per week?
Complete the W-4 for employment at Dark Forest Ranch:Madeline Emma Jenkins203 County Road 4Douglas, Wyoming 82036SSN: 545-02-1987Married filing jointlyThree dependents. She has no child care expenses but is able to claim the child tax credit and does not wish to withhold additional amounts.She has
When does a payroll record retention period begin?
Camber is the payroll clerk for Multisound Speakers. A colleague who is classified as an independent contractor requests to be classified as an employee. What factors should Camber consider?1. Relationship of the parties.2. Behavioral control.3. Method of compensation.4. Financial control.
Rachael is verifying the accuracy and amount of information contained in the employee records for her company. Which of the following items should be present in the employee information?1. Job title2. Social Security number3. Birth date (if under 19)4. Previous addresses
Carlie receives her pay twice per month. Which of the following choices describes her pay frequency?
Amanda, a nonexempt employee at Old Tyme Soda Distributing, works a standard 8:00–5:00 schedule with an hour for lunch. Amanda works in a state requiring overtime for hours in excess of 40 in a week. During the week she worked the following schedule:Monday 8:00-11:00, 12:00-4:45, 7.75
What are the important considerations in setting up a payroll system?
Embry is a new employee of the Peak House restaurant. Which of the following will provide proof of identity for the completion of the I-9? (Select all that apply.)
What constitutes internal controls for a payroll department?
Connie, a nonexempt employee of Westside Motel, works a standard 6:00–3:00 p.m. schedule with an hour for lunch. Connie works in a state requiring overtime for hours over 8 per day and for those over 40 in a week. During the week, she worked the following
Skylar is the new bookkeeper for a small company and was hired to replace a long-time employee who retired. Upon starting the position, Skylar notices that the prior bookkeeper used a purely manual system. The company owner has said that Skylar may update the payroll system. What options are
Bernie manages a ski resort that has year-round and seasonal employees. Assuming that the ski resort engages in interstate commerce, which are FLSA requirement(s) that Bernie should consider?1. Hourly wages paid to employees2. Safety of the working conditions3. Number of hours worked per week4.
Anya is a candidate for the position of sales manager with the footwear department of a major retail outlet. She is going to be required to supervise several employees and can determine the direction in which she will complete the assignments given to her. Which law appears to be the most
Of the following taxes, which one(s) is/are examples of statutory deductions that pertain to employers?A. Social Security taxB. Employee federal income taxC. FUTAD. 401(k) contributions
What taxes are paid by the employer only?
As of 2016, which of the following accurately represents the full FUTA rate and wage base?A. 0.6%, $118,500B. Varies by stateC. 6%, $7,000D. 0.6%, $7,000
Davis is the accounting for Heads Up Hat Corporation. As he prepares the payroll for the semimonthly pay period ending December 15, he notices that some of the year-to-date executives' salaries have exceeded $200,000. What payroll tax responsibilities does Heads Up Hat Corporation have, especially
Freedom, Inc., has 16 employees within Denver City & County. All of the employees worked a predominate number of hours within the city. The employees made $7.25 per hour and worked 160 hours each during the month. The employer must remit $4.00 per month per employee that earns more than $500
Of the IRS-stipulated lookback periods, which ones are the most commonly used?
What taxes are paid by the employee only?
Semolians has 22 employees within Denver City & County. The employees each made $8.50 per hour and worked and worked 160 hours each during the month. The employer must remit $4.00 per month per employee that earns more than $500 per month. Additionally, employees who earn more than $500 per
Annie is a payroll clerk in Wilty Enterprises. She receives a written notice from the IRS notifying the company that they are monthly schedule depositors. How is the deposit schedule determined?A. The number of empLoyees in the company.B. The payroll frequency used by the company.C. The amount of
Joseph earned $68,000 in 2016 for a company in Kentucky. He is single with 1 withholding allowance and is paid annually. Compute the following employee share of the taxes using the percentage method in Appendix C.
The Queen Bee Company has annual payroll taxes of $49,250 during the most recent lookback period. Which payroll deposit frequency will they have, based on that lookback period?A. QuarterlyB. MonthlyC. SemiweeklyD. Annual
Leslie earned $155,000 in 2016 for a company in Pennsylvania. She is single with four dependents and is paid annually. Leslie contributed $3,550 to her 401(k) plan and $2,000 to her Section 125 plan. Employees in Pennsylvania contribute 0.07% of gross pay toward SUTA tax, which has a wage base for
Match the amounts payroll tax liabilities from the lookback period with the appropriate tax deposit schedule.A. $42,300 annual payroll taxes 1. AnnualB. $145,033 annual payroll taxes2. MonthlyC. $128,450 payroll tax for 1 pay period3. SemiweeklyD. $1,580 annual payroll taxes4. Next Business Day
Using the information from P5-4A, compute the employer’s share of the taxes. The FUTA rate for 2016 is .6% on the first $7,000 of employee wages, and the SUTA rate for the company in Kentuckyis 5.4% with a wage base of $10,200.Data from P5-4AJoseph earned $68,000 in 2016 for a company in
Renny is new payroll accountant with Jupiter Products in Sparks, Nevada. The company had a payroll tax liability of $250,350 during the most recent lookback period. For the quarter ending September 30, 20XX, which Federal form(s) should he file?A. Form 940B. Form W-2C. Form SS-8D. Form 941
How often must a company report 941 earnings/withholdings?
Using the information from P5-4B, compute the employer’s share of the taxes. The FUTA rate in Pennsylvania for 2016 is .6% on the first $7,000 of employee wages, and the SUTA rate is 3.456% with a wage base of $9,500.Data from P5-4BLeslie earned $155,000 in 2016 for a company in Pennsylvania. She
Which form(s) should be prepared and filed by companies with employees and payroll tax liabilities exceeding $50,000 as of December 31, 20XX?A. Form 940B. Form W-4C. Form 941D. Form W-2
Which of the following is a form that must accompany all Forms W-2 submitted to the Social Security Administration?

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Payroll Accounting 2017 3rd edition Jeanette Landin, Paulette Schirmer - Solutions

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