1. Company X has an employee who is paid weekly. For Company X the FUTA

tax rate is 6%. The limit for FUTA is $7000 of employee annual earning subject to the applicable tax.

The employee earns $1000 for the week and has cumulative earnings year to date through the previous week of

$6500. How much is deducted from the employees weekly paycheck for FUTA?

A. -60-

B. 30

C. 600

D. 300

E. None of the above

2. For the journal entry-- Dr. Accounts Payable 400; Cr. Cash 400--, what is the correct analysis of the journal entry?

		A. Accounts Payable, Asset, Increases; Cash, Asset Decreases
		B. Accounts Payable, Liability, Increases; Cash, Asset Decreases
		C. Accounts Payable, Liability, Decreases; Cash, Asset Decreases
		D. Accounts Payable, Liability, Decreases; Cash, Asset Increases
		E. None of the above