Question

QUESTION 13 During June, the Charlie Corporation issued 10,000 shares of $. 10 par common stock and received $240,000 Show the effects of this transaction on the company's assets, liabilities, and stockholders' equity a. Assets increase by $240,000 and liabilities increase by $240,000 b. Assets increase by S240,000, liabilities increase by $239,000, and stockholders' equity increases by $1,000 c. Assets increase by $240,000 and stockholders' equity increases by $240,000 d. Liabilities decrease by $240,000 and stockholders' equity increases by $240,000 QUESTION 14 For this year, assume the OASDI FICA tax rate is 6% of the first $60,000 of each employee's yearly earnings and the Medicare FICA tax is 1% of each employee's yearly earnings. Prior to November 2, William had earned gross pay of $58,000. During the work onded November 8, William earned $2,500 During the week, in addition to FICA taxes, William had federal income taxes of $600, state income taxes of $110, and union dues of $10 withheld from his pay Calculate the dollar amount of William's not pay for the week ended November 8. a $1,605 b. $1.635 c. $1,640 d. $1,780

Answer 1

13

Assets increase by $240,000 and stockholders' equity increases by $240,000

Option C is correct

14
Gross pay	2500
Less: Deductions
OASDI FICA tax	120	=(60000-58000)*6%
Medicare tax	25	=2500*1%
Federal income taxes	600
State income taxes	110
Union dues	10
Total Deductions	865
Net pay	1635
Option B $1,635 is correct