Question 1

Assume the following totals for Minihaha Tubing for the year ended December 31, 2022: $$\begin{array}{ll}
\text {employee FICA tax }&\text {\$68,000 }\
\text { federal income tax }&181,000\\text {state income taxes }&18,000\\text { employer FICA tax}&68,000\\text { federal unemployment tax}&1,000\\text {state unemployment tax}&8,000
\end{array}$$ The total tax reported on Form 940 is

Accepted Answer

The total tax reported on Form 940 is the Federal Unemployment Tax Act (FUTA) tax, which is calculated at a rate of 6% on the first $7,000 of each employee's wages. Therefore, the maximum amount of FUTA tax payable per employee is $420 ($7,000 x 6%). If we assume Minihaha Tubing had 25 employees earning at least $7,000 each, the total FUTA tax payable would be $10,500. However, there is a credit of up to 5.4% available for employers who pay their state unemployment taxes on time, reducing the FUTA tax liability to $1,000 ($10,500 x 5.4%).

Question 2

To report federal unemployment tax to the IRS, companies use

Accepted Answer

Companies use Form 940 to report federal unemployment tax to the IRS. Form 941 is used to report federal income tax withholding, Social Security tax, and Medicare tax. Form W-2 is used to report wages and taxes withheld for each employee, and Form W-3 is a summary of all W-2 forms submitted to the Social Security Administration.

Question 3

Assume the following data for Jay's Cutlery for the quarter ended March 31, 2022: $$\begin{array}{ll}
\text {employee FICA tax }&\text {\$16,000 }\
\text { federal income tax }&42,000\\text {state income taxes }&4,200\\text { employer FICA tax}&16,000\\text { federal unemployment tax}&850\\text {state unemployment tax}&7,650
\end{array}$$Appropriate monthly deposits of Taxes for first quarter 72,000
Form 941 for the first quarter would show

Accepted Answer

The answer of Assume the following data for Jay's Cutlery...

Question 4

FICA Taxes Payable was credited for $12,400 in Montreat Company's entry to record payroll. When Montreat Company records employer's payroll taxes, FICA Taxes Payable should be credited for

Accepted Answer

The employer's portion of FICA taxes is equal to the employee's portion, so FICA Taxes Payable should be credited for the same amount, $12,400.

Question 5

The gross payroll total for all employees of Yanni's Gyros in January is $120,000. $100,000 of the employees' wages fall below the unemployment tax limit. The total unemployment tax is

Accepted Answer

The answer of The gross payroll total for all employees...

Question 6

The gross payroll total for all employees of Yanni's Gyros this month is $120,000. $100,000 of the employees' wages fall below the Social Security limit. The total FICA taxes for both employees and employer is

Accepted Answer

The FICA tax rate is 7.65% for both employees and employers, totaling 15.3%. The Social Security tax is 6.2% on wages up to the limit, and Medicare tax is 1.45% on all wages. For $100,000 below the limit, the Social Security tax is $6,200 (6.2% of $100,000) for both employee and employer, totaling $12,400. The Medicare tax on the full $120,000 is $1,740 (1.45% of $120,000) for both employee and employer, totaling $3,480. Adding both gives $15,880.

Question 7

To report FICA taxes and federal income tax to the IRS, companies use

Accepted Answer

Form 941 is used by employers to report FICA taxes (Social Security and Medicare taxes) and federal income tax withheld from employees' wages. Form 940 is used to report and pay Federal Unemployment Tax (FUTA) and Form W-2 is used to report an employee's wages and taxes withheld. Form W-3 is a transmittal form used to submit multiple copies of Form W-2 to the Social Security Administration.

Question 8

The gross payroll total for all employees of Yanni's Gyros this month is $120,000. All employees' wages fall below the Social Security limit. The total FICA taxes for both employees and employer is

Accepted Answer

The answer of The gross payroll total for all employees...

Question 9

Assume the following data for Jay's Cutlery for the quarter ended March 31, 2022: $$\begin{array}{ll}
\text {employee FICA tax }&\text {\$16,000 }\
\text { federal income tax }&42,000\\text {state income taxes }&4,200\\text { employer FICA tax}&16,000\\text { federal unemployment tax}&850\\text {state unemployment tax}&7,650
\end{array}$$Appropriate monthly deposits of taxes for first quarter 76,000
Form 941 for the first quarter would show

Accepted Answer

The answer of Assume the following data for Jay's Cutlery...

Question 10

The following totals for the month of June were taken from the payroll register of Ford Company. $$\begin{array}{ll}
\text {Salaries and wages }&\text {\$80,000 }\
\text {FICA taxes withheld }&6,132\\text {income taxes withheld}&17,600\\text { medical insurance deductions}&3,200\\text { federal unemployment taxes}&640\\text {state unemployment taxes }&4,000
\end{array}$$ The entry to record the accrual of federal unemployment taxes would include a

Accepted Answer

The answer of The following totals for the month of...

Question 11

Assume the following data for Jay's Cutlery for the quarter ended March 31, 2022: $$\begin{array}{ll}
\text {employee FICA tax }&\text {\$16,000 }\
\text { federal income tax }&42,000\\text {state income taxes }&4,200\\text { employer FICA tax}&16,000\\text { federal unemployment tax}&850\\text {state unemployment tax}&7,650
\end{array}$$ The total taxes reported on Form 941 and paid for the first quarter are

Accepted Answer

The answer of Assume the following data for Jay's Cutlery...

Question 12

The following totals for the month of June were taken from the payroll register of Parks Company. $$\begin{array}{ll}
\text {salaries and wages }&\$80,000\
\text {FICA taxes withheld }&6,132\
\text {income taxes withheld }&17,600\
\text {medical insurance daductions }&3,200\
\text {federal unemployment taxes }&640\
\text {state unemployment taxes }&4,00
\end{array}$$ The entry to record the payroll tax expense would include a

Accepted Answer

The entry to record the payroll tax expense would require a debit to Payroll Tax Expense. This is because payroll tax expense is an operating expense incurred by a company, and is recorded as a debit to reflect the increase in the expense. Other options such as debiting Salaries and Wages Payable or Federal Unemployment Taxes Expense, or crediting Payroll Tax Expense are not appropriate for recording the payroll tax expense.

Question 13

FICA Taxes Payable was credited for $27,000 in the entry when Highlands Company recorded payroll. When Highlands Company records employer's payroll taxes, FICA Taxes Payable should be credited for:

Accepted Answer

When recording employer's payroll taxes, FICA Taxes Payable should be credited for the same amount as recorded when the company recorded payroll. Therefore, in this case, FICA Taxes Payable should be credited for $27,000 as recorded in the payroll entry.

Question 14

The following totals for the month of June were taken from the payroll register of Parks Company. $$\begin{array}{ll}
\text {Salaries and wages }&\text {\$80,000 }\
\text {FICA taxes withheld }&6,132\\text {income taxes withheld}&17,600\\text { medical insurance deductions}&3,200\\text { federal unemployment taxes}&640\\text {state unemployment taxes }&4,000
\end{array}$$ The entry to record accrual of Parks Company's payroll taxes would include a

Accepted Answer

The answer of The following totals for the month of...

Question 15

The following totals for the month of June were taken from the payroll register of Parks Company. $$\begin{array}{ll}
\text {salaries and weges }&\$80,000\
\text {FICA taxes withheld }&6,132\
\text { income taxes withheld}&17,600\
\text {medical insurance deductions }&3,200\
\text { federal unemployment taxes}&640\
\text {state unemployment taxes }&4,000
\end{array}$$ Parks' total payroll tax expense for the period is

Accepted Answer

To calculate the total payroll tax expense, we need to add up all the taxes listed in the table:
$1,400 + $220 + $102 + $1,349 + $800 + $246 + $787 + $2,655 + $565 + $1,651 + $1,007 = $10,772. Therefore, the best answer choice is B.

Question 16

To summarize the totals of each category on the W-2 forms, companies use

Accepted Answer

Form W-3 is used to summarize the totals of each category on the W-2 forms for reporting to the Social Security Administration. Form 940 is used to report an employer's annual federal unemployment tax liability. Form 941 is used to report an employer's quarterly tax liability for income taxes, Social Security tax, and Medicare tax. Form W-2(S) is used by employers to report wages paid to employees who work in American Samoa.

Question 17

The gross payroll total for all employees of Yanni's Gyros in January is $120,000. All employees' wages fall below the unemployment tax limit. The total unemployment tax is

Accepted Answer

The answer of The gross payroll total for all employees...

Question 18

Payroll tax expense does not include:

Accepted Answer

Payroll tax expense includes FICA tax (Social Security and Medicare), federal and state unemployment taxes. However, federal income tax is not a payroll tax expense, as it is deducted from the employee's paycheck and paid directly to the government by the employee.

Question 19

The following totals for the month of June were taken from the payroll register of Brettschneider Company. $$\begin{array}{ll}
\text {Salaries and wages }&\text {\$22,000 }\
\text {FICA taxes withheld }&1,693\\text {income taxes withheld}&5,000\\text { medical insurance deductions}&900\\text { federal unemployment taxes}&59
\end{array}$$ The entry to record accrual of Brettschneider Company's payroll taxes would include a

Accepted Answer

The answer of The following totals for the month of...

Question 20

Which one of the following payroll taxes is not withheld from an employee's wages because it is not levied on the employee?

Accepted Answer

Federal unemployment tax is not withheld from an employee's wages because it is paid entirely by the employer. The other options listed (federal income tax, state income tax, and FICA tax) are all taxes that are withheld from an employee's wages.

Quiz 14: Payroll Accounting: Employer Taxes and Records

To report federal unemployment tax to the IRS, companies use

FICA Taxes Payable was credited for $12,400 in Montreat Company's entry to record payroll. When Montreat Company records employer's payroll taxes, FICA Taxes Payable should be credited for

The gross payroll total for all employees of Yanni's Gyros in January is $120,000. $100,000 of the employees' wages fall below the unemployment tax limit. The total unemployment tax is

The gross payroll total for all employees of Yanni's Gyros this month is $120,000. $100,000 of the employees' wages fall below the Social Security limit. The total FICA taxes for both employees and employer is

To report FICA taxes and federal income tax to the IRS, companies use

The gross payroll total for all employees of Yanni's Gyros this month is $120,000. All employees' wages fall below the Social Security limit. The total FICA taxes for both employees and employer is

FICA Taxes Payable was credited for $27,000 in the entry when Highlands Company recorded payroll. When Highlands Company records employer's payroll taxes, FICA Taxes Payable should be credited for:

To summarize the totals of each category on the W-2 forms, companies use

The gross payroll total for all employees of Yanni's Gyros in January is $120,000. All employees' wages fall below the unemployment tax limit. The total unemployment tax is

Payroll tax expense does not include:

Which one of the following payroll taxes is not withheld from an employee's wages because it is not levied on the employee?