1. If a company had net income of $1,496,875, a times interest earned ratio of 4, a tax rate of 40%, and operating income of $3,070,000, what is the company's interest expense for the year?

$1,074,500

$730,079

$374,219

$767,500

$1,574,000

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2.

Mission Company has three employees:

	Gross pay through July	Gross pay for August
Smith	$2,700	$2,500
Cain	28,800	5,000
Clark	96,100	14,600

The company is subject to the following taxes:

Tax	Rate	Applied to
FICA Social security	6.2%	First $106,800
FICA Medicare	1.45%	All gross pay
FUTA	.80%	First $7,000
SUTA	5.40%	First $7,000

What are Mission Company's total August payroll taxes for Cain?

$2,203.20

$1,820.70

$2,585.70

$692.50

$382.50

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3.

Conner Company borrows $186,400 cash on November 1, 2013, by signing a 90-day, 8% note. What is the total amount of interest expense that Conner will recognize for this note?

$3,728.

$0, no interest expense is recognized.

$1,491.

$2,961.

$14,912.

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4.

The FICA tax for Social Security is 6.2% and the FICA tax for Medicare is 1.45%. An employee's share of both FICA taxes was $4,131.00.Given that this employee did not exceed the FICA earnings limitation, compute gross pay.

$284,896.55.

$66,629.03.

Zero, since the employee's pay did not exceed the FICA limit.

$54,000.00.

$31,602.15.

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5.

An employee earned $45,200 during the year working for an employer. The FICA tax for social security is 6.2%, and the FICA tax for Medicare is 1.45%. The employee's share of FICA taxes is:

$6,915.60.

$2,802.40.

$655.40.

Zero, since the employee's pay exceeds the FICA limit.

$3,457.80.

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6.

On December 1, Martin Company signed a $6,000, 3-month, 7% note payable, with the principal plus interest due on March 1 of the following year. What amount of interest expense is accrued at December 31 on the note?

$0

$35

$105

$420

$60

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7.

If a company had net income of $2,539,600, interest expense of 250,000, a tax rate of 30%, and operating income of $4,520,000, what is the times interest earned ratio?

10.16

18.08

7.92

7.22

3.06