Question 1

A merit rating system for SUTA means:

Accepted Answer

Merit rating system for SUTA means that rates will vary with employment record, taking into account an employer's history of layoffs, terminations, and other factors that may affect their contribution to the unemployment insurance fund. This allows employers with a good employment record to pay lower rates while employers with a poor record pay higher rates.

Question 2

FICA tax base:

Accepted Answer

The FICA tax base changes yearly based on inflation and other factors.

Question 3

Ron Swift earned $1,500 last week. He is married, is paid biweekly, and claims two exemptions. Using the percentage method, his income tax is:

Accepted Answer

The answer of Ron Swift earned $1,500 last week. He...

Question 4

Jim Smith is a salesman who receives a $1,100 draw per week. He receives a 12% commission on all sales. Sales for Jim were $205,000 for the month. Assuming a four-week month, Jim's commission after the draw is:

Accepted Answer

Jim's total commission for the month is 12% of $205,000, which is $24,600. His draw for the month is $1,100 per week for 4 weeks, totaling $4,400. Therefore, his commission after the draw is $24,600 - $4,400 = $20,200.

Question 5

Jill Hartman earns $750 per week plus 3% of sales in excess of $6,500. If Jill sells $25,000 in the first week, her earnings are:

Accepted Answer

The answer of Jill Hartman earns $750 per week plus...

Question 6

Jim Ross is an automobile salesman who receives a salary of $500 per week plus a commission of 3% on all sales. During a four-week period he sold $42,000 worth of cars. What were Jim's average earnings?

Accepted Answer

The answer of Jim Ross is an automobile salesman who...

Question 7

To date, Jay Ward has cumulative earnings of $107,600. This week he is paid $3,000. The total amount of Social Security tax for this week is (assume a rate of 6.2% on $110,100 for Social Security and 1.45% for Medicare):

Accepted Answer

Jay Ward's cumulative earnings before this week are $107,600. Adding this week's $3,000 brings it to $110,600. However, Social Security tax only applies up to $110,100. Therefore, only $2,500 of this week's earnings are subject to the 6.2% Social Security tax, which equals $155.00.

Question 8

Ron Smith has cumulative earnings of $110,100. This week he is paid $2,000. Assuming the Social Security rate is 6.2% on $107,900 and is 1.45% for Medicare, what is the amount of Social Security and Medicare taken out of Ron's earnings?

Accepted Answer

The answer of Ron Smith has cumulative earnings of $110,100....

Question 9

Calculate the gross pay for Ryan O'Neal, an apple picker, assuming he picked 7,200 apples:

Accepted Answer

The answer of Calculate the gross pay for Ryan O'Neal,...

Question 10

Jeff Jones earns $1,200 per week. He is married and claims four withholding allowances. The Social Security rate is 6.2% on $110,100, and Medicare is 1.45%. To date his cumulative wages are $6,000. Each paycheck, his employer also deducts $42.50 for health insurance. What is his net pay? (Calculate FIT by percentage method.)

Accepted Answer

The answer of Jeff Jones earns $1,200 per week. He...

Question 11

The taxable earnings column of a payroll register records:

Accepted Answer

The taxable earnings column of a payroll register records what wages will be taxed, not the actual or estimated tax.

Question 12

The more allowances claimed on Form W-4:

Accepted Answer

The more allowances claimed on Form W-4, the less money will be deducted for federal income tax (FIT). This is because more allowances indicate that the employee is eligible for more exemptions and deductions, which reduces their overall taxable income.

Question 13

Percentage method tables can show:

Accepted Answer

Percentage method tables can be used to calculate federal income tax withholdings for all types of payroll frequencies, including weekly, biweekly, semimonthly, and monthly.

Question 14

Bill Burton earns $750 per week plus 5% of sales in excess of $7,500. If Bill sells $34,000, how much are his earnings?

Accepted Answer

The answer of Bill Burton earns $750 per week plus...

Question 15

The percentage method aids in calculating:

Accepted Answer

The answer of The percentage method aids in calculating:
...

Question 16

Lana Powell has cumulative earnings of $110,000 at the end of September. In the first week in October she earns $2,000. The amount deducted for Social Security and Medicare from her check is (assume Social Security rate of 6.2% on $110,100 and Medicare of 1.45%):

Accepted Answer

The answer of Lana Powell has cumulative earnings of $110,000...

Question 17

Bill Burne's earnings are subject to deductions for Social Security, Medicare, and FIT. To date his cumulative earnings are $110,000. This week Bill earns $1,200. Bill, who is married, is paid weekly and claims three exemptions. Assume the Social Security rate is 6.2% on $110,100 and 1.45% for Medicare. His net pay for the week is:

Accepted Answer

Bill's earnings exceed the Social Security wage base of $110,100, so only $100 is subject to the 6.2% Social Security tax. Medicare tax is 1.45% on the full $1,200. FIT is calculated based on the IRS withholding tables for a married person with three exemptions. After calculating these deductions, his net pay is $1,069.39.

Question 18

Leo Corporation pays its employees on a graduated commission scale: 6% on the first $40,000 in sales, 7% on sales from $40,000 to $80,000, and 9% on sales greater than $80,000. Bernie Kaminsky had sales of $105,000. His commission is:

Accepted Answer

- Bernie Kaminsky's sales fall into three different tiers: 
    - The first $40,000 at 6% = $2,400
    - The next $40,000 ($80,000 - $40,000) at 7% = $2,800
    - The remaining $25,000 ($105,000 - $80,000) at 9% = $2,250
- Adding these three amounts, Bernie Kaminsky's total commission is $2,400 + $2,800 + $2,250 = $7,450. Therefore, the correct answer is choice B.

Question 19

Lee Wong is a sales clerk at Sears. She is paid $8.00 per hour plus a commission of 4% on all sales. Assuming Lee works 39 hours and has sales of $4,000, her gross pay is:

Accepted Answer

Lee's hourly pay = $8.00 x 39 = $312
Commission on sales = 4/100 x $4,000 = $160
Total gross pay = $312 + $160 = $472

Question 20

FUTA tax is paid:

Accepted Answer

FUTA tax (Federal Unemployment Tax Act) is paid by the employer, and it is based on a percentage of the employee's wages. This tax is used to fund state unemployment programs that provide temporary financial assistance to workers who become unemployed.

Quiz 7: Payroll and Income Tax