Exam 7: Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Given the following payroll items you are to identify whether they are the responsibility of the employer and/or the employee by placing an X in the appropriate column. -

Greg's Auction House's payroll for April includes the following data: What is the employee's portion of the taxes? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest whole dollar.)

A FUTA tax credit:

The amount withheld for FICA is based on the W-4 form.

The employee earnings record:

Compute the net pay for each employee listed below. Assume the following rates: FICA-OASDI 6.2% on a limit of $128,400; Medicare is 1.45%; federal income tax is 20%; state income tax is 5%; and union dues are $20.

When an employee's earnings are greater than FICA base limit during the calendar year, no more FICA-OASDI tax is deducted from earnings.

For which of the following taxes is there a ceiling on the amount of employee annual earnings subject to the tax?

Insurance paid in advance by employers to protect their employees against loss due to injury or death incurred during employment is:

Bill James earned $800 for the week. If his cumulative earnings are $40,000 prior to this pay period, how much FICA-OASDI must his employer withhold from his earnings? FICA tax rates are OASDI 6.2% on a limit of $128,400. (Round your answer to the nearest whole dollar.)

When calculating the employee's payroll, the clerk forgot about the wage base limits. What impact could this error cause on the employee's check?

Given the following payroll items you are to identify whether they are the responsibility of the employer and/or the employee by placing an X in the appropriate column. -

Which of the below allowances would have the most amount of taxes withheld for federal income tax purposes?

Jim Stein's hourly wage is $40.00, and he worked 42 hours during the week. Assuming an overtime rate of time and a half over 40 hours, Jim's gross pay is: (Round your answer to the nearest whole dollar.)

FUTA and SUTA are paid for exclusively by the employer.

The journal entry to record the estimated advance premium payment for workers' compensation is:

Carl's earnings during the month of March were $6,400. His earnings for the year prior to March were $5,500. Carl's employer is subject to federal unemployment taxes of 0.8% and state unemployment taxes of 5.4% on the first $7,000. The employer's unemployment payroll tax expense for Carl in the month of March is: (Round any intermediate calculations to the nearest cent, and your final answer to the nearest whole dollar.)

A work week is 160 hours in length.

The Fair Labor Standards Act must be followed if:

Jim Barnes' cumulative earnings are $103,000, and his gross pay for the week is $6,400. If the FICA rates are: OASDI 6.2% on a limit of $128,400 and Medicare is 1.45%, what are his FICA-OASDI and FICA-Medicare taxes for the week? (Round your answers to the nearest whole dollar.)