81. The amount of federal income taxes withheld from an employee's paycheck is determined by:
A. The employee's annual earnings rate and number of withholding allowances.
B. The employer's merit rating.
C. The employee’s annual earnings rate and merit rating.
D. Multiplying gross pay by 6.2%.
E. The employee’s credit rating.
82. An employee earned $47,000 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:
A. $681.50.
B. $2,914.00.
C. $3,595.50.
D. $7,191.00.
E. Zero, since the employee's pay exceeds the FICA limit.
83. 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 $3,901.50. Given that this employee did not exceed the FICA earnings limitation, compute gross pay.
A. $269,068.96.
B. $62,927.42.
C. $29,846.48.
D. $51,000.
E. Zero, since the employee's pay did not exceed the FICA limit.
84. FUTA taxes are:
A. Social Security taxes
B. Medicare taxes
C. Employee income taxes
D. Unemployment taxes
E. Employee deductions
85. The current FUTA tax rate is 0.8% and the SUTA tax rate is 5.4%. Both taxes are applied to the first $7,000 of an employee's pay. Assume that an employee earned $8,900. What is the amount of total unemployment taxes the employer must pay on this employee's wages?
A. $322.00.
B. $434.00.
C. $480.60.
D. $551.80.
E. Zero, since the employee's wages exceed the maximum of $7,000.
86. An employee earned $4,300 working for an employer. The current rate for FICA social security is 6.2% and the FICA Medicare rate is 1.45%. The employer's total FICA payroll tax for this employee is:
A. $62.35.
B. $266.60.
C. $328.95.
D. $657.90.
E. Zero, since the FICA tax is a deduction from an employee's pay and not an employer tax.
87. Karen Cooper, the founder of SmartIT Staffing, realized that effectively managing payroll was crucial to the success of her business. If an employee of the company earns $50,500 per year, SmartIT Staffing’s total FICA payroll tax for this employee is:
A. $3,863.25.
B. $3,131.00.
C. $732.25.
D. $3,535.
E. Zero because the employee has not earned more that the FICA earnings limitation.
88. An estimated liability:
A. Is an unknown liability of a certain amount.
B. Is a known obligation of an uncertain amount that can be reasonably estimated.
C. Is a liability that may occur if a future event occurs.
D. Can be the result of a lawsuit.
E. Is not recorded until the amount is known for certain.
89. Employees earn vacation pay at the rate of one day per month. During July, 25 employees qualify for one vacation day each. Their average daily wage is $100 per day. What is the amount of vacation benefit expense for the month of July?
A. $25
B. $100
C. $1,200
D. $2,500
E. $30,000
90. Employee vacation benefits:
A. Are estimated liabilities.
B. Are contingent liabilities.
C. Are recorded as an expense when the employee takes a vacation.
D. Are recorded as an expense when the employee retires.
E. Increase net income.