ACC115 72L EXAM 3 CH 5&6 NAME: DATE: SCORE /100 Part 1: Matching: 15 Points 1. Negative balance employers 2. Household employers 3. Title XII advances 4. Form 940 5. Voluntary contributions 6. Payroll register 7. Payroll taxes 8. Garnishment 9. Pay cards 10. Disposable earnings A. Extra state unemployment contributions in addition to employers regular SUTA tax payments B. Annual Federal Unemployment Tax Return C. Borrowings from federal government to pay unemployment compensation benefits D. Employees whose reserve account has been charged with more benefits paid out than contributions made E. Pay FUTA tax with Schedule H of Form 1040 F. Debit card-based accounts G. Legal procedure by which a portion of a persons wages must be withheld for payment of a debt H. Expense account for FICA, FUTA and SUTA taxes on the Employer I. Earnings remaining after withholding for income taxes and for other amounts required by law J. Provides information needed in preparing the journal entries for payroll Part 2: True or False 20 Points 1.The federal unemployment tax is imposed on employers, and thus, is not deducted from employeeswages 2.Educational assistance payments to workers are considered nontaxable wages for unemployment purposes 3.For the purpose of the FUTA tax, members of partnerships are considered employees 4.FUTA coverage does not include service of any nature performed outside the United States by a citizen of the United States for an American employer 5.The location of the employees residence is the primary factor to be considered in determining coverage of an employee who works in more than one state 6.A bonus paid as remuneration for services is not considered taxable wages for unemployment tax purposes even if the employee has not exceeded the taxable wage base 7.In the case of an employee who changes jobs during the year, only the first employer must pay FUTA tax on that employees earnings 8.The maximum credit that can be applied to the FUTA tax because of SUTA contributions is 5.4%. 9.If an employer pays a SUTA tax of 2.0%, the total credit that can be claimed against the FUTA tax is 2.0% 10.If the employer pays all of the state unemployment contributions after the filing date for Form 940, the maximum credit that can be claimed against the FUTA tax is 90% of 6.2% 11.Employee contributions made on a pretax basis to a cafeteria plan are included in total payments on Form 940 and then deducted as exempt payments 12.The payments of FUTA taxes are included with the payments of FICA and FIT taxes and are paid as one lump sum 13.If an employers FUTA tax liability for the 1st quarter is $935, no payment is required for the 1st quarter 14.If a business has ceased operations during the year, as long as the payments of the FUTA taxes have been made, a Form 940 does not need to be completed for that year 15.Form 940 mailed by the due date is timely filed even if received by the IRS after the due date. 16.In certain circumstances, a FUTA tax payment can be remitted with Form 940. 17.All of the states allow employers to make voluntary contributions into their state unemployment funds so that a lower tax contribution rate would be assigned 18.Employers have to pay a FUTA tax on only the first $3,500 of each part-time employees earnings (1/2 of the full $7,000 limit) 19.Voluntary contributions by employers into a states unemployment fund in order to receive a reduced unemployment compensation rate are not permitted by all states 20.Form 940 can also be used to file an amended return Part 3: Multiple Choice 20 Points 1. Carmen Gaetano worked 46 hours during this payweek. He is paid time-and-a-half for hours over 40 and his pay rate is $17.90/hour. What was his overtime premium pay for this workweek? a. $107.40 b. $161.10 c. $50.70 d. $53.70 e. $26.85 2. The employees earnings record provides information for each of the following except: a. completing Forms W-2. b. completing the journal entry to record the payroll. c. determining when the accumulated wages of an employee reach cutoff levels. d. preparing reports required by state unemployment compensation laws. e. preparing the payroll register. 3. Which of these accounts shows the total gross earnings that the employer incurs as an expense each payday? a. Payroll Taxes b. Federal Income Taxes Payable c. Wages Expense d. Salaries Payable e. None of the above 4. Which of the following accounts is an expense account in which an employer records the FICA, FUTA, and SUTA taxes? a. Wages Expense b. Payroll Taxes c. SUTA Taxes Payable d. Salaries Payable e. None of the above 5. The entry to deposit FICA taxes and federal income taxes withheld involves all of the following accounts except: a. Payroll Taxes. b. FICA Taxes PayableOASDI. c. FICA Taxes PayableHI. d. Employees FIT Payable. e. Cash. 6. Which of the following is not an expense of the employer? a. FUTA tax b. FICA taxHI c. FICA taxOASDI d. SUTA tax e. Union dues withheld 7. When recording the deposit of FUTA taxes owed, the proper entry is: a. FUTA Tax Expense Cash b. Payroll Taxes Cash c. Payroll Taxes FUTA Taxes Payable d. FUTA Taxes Payable Cash e. FUTA Tax Expense FUTA Taxes Payable 8. The entry made at the end of the accounting period to record wages incurred but unpaid is: a. Wages Expense Wages Payable b. Wages Expense FICA Taxes PayableOASDI FICA Taxes PayableHI FIT Payable Wages Payable c. Wages Payable Cash d. Wages Expense Cash e. Wages Expense Payroll Taxes Wages Payroll 9. Which of the following items would require an adjusting entry at the end of each accounting period? a. Garnishment for child support payments b. Withholdings for a 401(k) plan c. Vacation pay earned by employees d. Union dues withheld e. None of the above 10. In recording the monthly adjusting entry for accrued wages at the end of the accounting period, the amount of the adjustment would usually be determined by: a. collecting the timesheets for the days accrued. b. using the same amount as the prior months adjustment. c. using the wages of the salaried workers only. d. a percentage of the previous weeks gross payroll. e. a percentage of the previous weeks net payroll. Part 4: Journal Entries 15 Points The totals from the first payroll of the year are shown below. Total FICA FICA FIT State Union Net Earnings OASDI HI W/H Tax Dues Pay $36,195.10 $2,244.10 $524.83 $6,515.00 $361.95 $500.00 $26,049.22 1. Journalize the entry to record the payroll. 2. Journalize the entry to record the employers payroll taxes (assume a SUTA rate of 3.7%). Part 5: Unemployment Taxes 15 Points Niemann Company has a SUTA tax rate of 7.1%. The taxable payroll for the year for FUTA and SUTA is $82,600. (a) The amount of FUTA tax for the year is (b) The amount of SUTA tax for the year is Part 6: 15 Points John Gercke is an employee of The Woolson Company. During the first part of the year, he earned $6,800 while working in State A. For the remainder of the year, the company transferred him to State B where he earned $16,500. The Woolson Companys tax rate in State A is 4.2%, and in State B it is 3.15% on the first $7,000. Assuming that reciprocal arrangements exist between the two states, determine the SUTA tax that the company paid to: (a) State A (b) State B