21) Kate’s earnings during the month of May were $1,200. Her earnings for the year prior to May were $12,300. Jake’s employer is subject to state unemployment of 2.0% and federal unemployment taxes of 0.8% on the first $7,000. The employer’s unemployment payroll tax expense for May is:

A) $10.40.

B) $26.00.

C) $0.

D) $36.40.

22) Sue’s jewelry Shoppe’s July payroll includes the following data:

 

Gross salaries

$12,000

Salaries subject to FICA:

 

   6.2% Social Security

12,000

   1.45% Medicare

12,000

Salaries subject to:

 

   FUTA 0.8%

6,000

   SUTA 2.7%

6,000

 

The employer’s payroll tax for the period would be:

A) $918.

B) $1,128.

C) $210.

D) $1,000.

 

23) Ocean’s Auction House’s payroll for April includes the following data:

 

Gross salaries

$20,000

Salaries subject to FICA:

 

   6.2% Social Security

17,500

   1.45% Medicare

20,000

Salaries subject to:

 

   0.8% FUTA

1,000

   2.0% SUTA

1,000

 

The employer’s payroll tax for the period would be:

A) $1,558.

B) $1,403.

C) $1,935.

D) $2,090.

24) Insurance paid in advance by employers to protect their employees against loss due to injury or death incurred during employment is:

A) life insurance.

B) worker’s compensation insurance.

C) liability insurance.

D) health insurance.

 

25) When calculating the employer’s payroll tax expense the clerk forgot about the wage base limits, this will cause:

A) the expenses to be overstated.

B) the assets to be overstated.

C) the liabilities to be overstated.

D) Both A and C are correct.

 

26) Workers’ compensation provides insurance for employees who are:

A) unemployed due to an economic downturn.

B) unemployed due to a plant closing.

C) injured while on the job.

D) not paid enough.

 

27) A FUTA tax credit:

A) is given to employers who pay their state unemployment taxes on time.

B) is usually in the amount of 5.4%

C) is applied against the 6.2% standard rate.

D) All of the above are correct.

 

28) Generally, employers can take a credit against the FUTA tax for contributions paid into the state unemployment funds.

29) Each state is responsible for administering an unemployment program.

 

30) The cost of workers’ compensation insurance must be estimated and paid in advance by the employer.

 

 

 



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