Question

Use this information for Harris Company to answer the following questions Assuming no employees are subject to ceilings for their earnings. Harris Company has the following information for the pay period of January 15-31 Gross payroll Social security rate Medicare rate SI0.000 6.0% 1.5% Federal income tax withheld Federal unemployment tax rate State unemployment tax rate SI SOO OS _1. Salaries Payable would be recorded for a. $8,200 b. $6,830 c. 58,630 d. 57,450 2. A pension plan that promises employees a fixed annual pension benefit, based on years of service and compensation, is called a(n) a. defined contribution plan b. defined benefit plan c. unfunded plan d. compensation plan _3. A pension plan that requires the employer to make annual pension contributions, with no promise to ex regarding future pension payments, is termed a. funded b. unfunded c. defined benefit d. defined contribution ___4. Anderson Co. issued a $50,000, 60-day, discounted note to National Bank. The discount rate is 69 aturity, assuming a 360-day year, the borrower will pay a. $53,000 b. $50,500 c. $50,000 d. $49,500

Answer 1

Answer -1
Salaries Payable would be recorded for - (d) $ 7,450
Explanation-
Salaries Expense		$      10,000
Less: Income tax		$         1,800
Less: Social Security Tax		$            600
Less: Medicare Tax		$            150
Salaries Payable		$         7,450
Answer-2
A pension plan that promises employees a fixed annual pension benefit, based on the year of service and compensation is called - (b) Defined Benefit Plan
Answer -3
A pension Plan that requires the employer to make annual pension contribution , with no promise regarding future pension payments is termed as (d) Defined contribution Plan.
Answer-4
The borrower will pay at the end- (b) $ 50,500
Explanation-
Base amount	$50,000
Interest	6%
Time	60 days
Interest Payable = 50000*6%*60/360
=50000*6%*60/360
= $500
Total payment=$(50000+500) = $50,500
Answer-5
The entry to record Employer Payroll Taxes would be- (c ) Payroll Tax expense for $ 1,373
Explanation-
Employer's Payroll Taxes include-
Social Security & medicare taxes withheld	$      1,125
FUTA & SUTA	$          248
Total	$      1,373
Answer-6
The cost basis recorded in the buyers accounting records to recognise the purchase is (c ) $ 1,60,000.
Explanation-
Cash paid	$40,000
Mortgage taken	$75,000
90 Day note taken	$45,000
Total Price paid	$1 60,000
Answer -7
Expected Useful life is -(b) at the time that the asset is placed in service.
Expected useful life is an accounting estimate of the number of years the asset is likely to remain in service for the purpose of cost effective revenue generation. Thus before assigning the asset in the books of account its useful life is estimated so that it can be easily depreciated over its useful life.
Answer-8
The amount of Gain/(Loss) in the transaction is (c ) gain of $5,000
Explanation-
Net book value = (310000-260000) = $50,000
Sale price = $55,000
Gain of $ 5,000 =$ (55000-50000)
Answer-9
Taxes deducted in determining an employee's net pay is - (c ) FICA Taxes.