Chapter 6 quiz - employer payroll taxes and labor planning PDF

Preview

Summary

employer payroll taxes and labor planning...

Description

Chapter 6 quiz 1. Mandatory employer-paid payroll taxes are known as statutory deductions. True 2. Payroll taxes for which the employer is responsible for paying a percent of employee compensation include FICA taxes, federal income tax, and FUTA tax. False 3. FUTA tax rates vary from state to state. False 4. A firm's frequency of tax deposits is determined by payroll tax liability during the lookback period. True 5. A firm that had $55,650 in annual payroll tax liability during the lookback period will be a monthly schedule depositor. False 6. An employer files Form 941 on either a quarterly basis or when they deposit payroll taxes, whichever is more frequent. False 7. Schedule B must accompany Form 941 for a firm classified as a semi-weekly payroll tax depositor. True 8. Form 940 is the report of tax liability for monthly schedule depositors. False 9. Form W-3 is the report of wages issued to independent contractors and is due to the IRS by January 31 of the following year. False 10. Employers who inadvertently fail to file quarterly or annual reports may be subject to monetary penalties. False 11. What is the term for the employer's mandatory payroll taxes that the government has written into law? A) Mandated taxes B) Legislated deductions C) Statutory deductions D) Legal deductions 12. Which of the following items is always the employer's sole responsibility? A) SUTA taxes B) FUTA taxes C) Federal income tax D) FICA taxes 13. On a recent paycheck, Mayim's taxes were as follows: Federal withholding, $32; Social Security tax, $35.94; Medicare, $8.90; and state income tax, $10.50. What is the employer's share for these taxes? A) $87.34 B) $55.34 C) $44.84 D) $35.94 14. Jeremiah is a full-time exempt employee who earns an annual salary of $215,000. What is the employer's annual FICA tax responsibility for Jeremiah's salary, based on an annual Social Security tax wage base of $127,200? A) $11,003.90 B) $10,506.50 C) $16,447.50 D) $16,582.50

Chapter 6 quiz 15. Johnny's Tavern had 16 employees and total annual wages of $376,948 during the previous year. All employees earned more than $7,000 during the year. What is Johnny's Tavern's FUTA tax liability? A) $22,616.88 B) $1,589.69 C) $7,000.00 D) $672.00 16. PCD Inc. operates as a Nevada business. The SUTA wage base for Nevada is $28,200. PCD Inc.'s SUTA tax rate is 4.5%. The employees' annual earnings for the past calendar year are as follows: Annabelle $36,750, Beatrice $24,880, Michael $42,200, Howard $26,500. What is PCD Inc.'s SUTA tax liability for the year? A) $5,864.85 B) $4,850.10 C) $6,037.82 D) $4,733.72 17. Timechex operates as a Nevada business. The employees' annual earnings for the past calendar year are as follows: Will, $28,440: Adalia, $35,786: Brian, $18,490; and Amanda, $6,500. What is Timechex's FUTA tax liability for the year? A) $28,000 B) $26,500 C) $168 D) $165 18. Dena's Decorations is a South Carolina business that has a SUTA rate of 3.6% and an annual SUTA wage base of $14,000. The employee earnings for the past calendar year are: B. Gilfilan $22,180, P. Laubach $37,690, S. Loftin $15,320, M. Moravec $9,840. What are the FUTA and SUTA tax liabilities for Dena's Decorations? A) FUTA $1,686.20; SUTA $168 B) FUTA $168; SUTA $1,866.24 C) FUTA $1,686.20; SUTA $531.36 D) FUTA $531.36; SUTA $2,102.58 19. Concrete Works is a California company with a SUTA tax of 5.2% and a SUTA wage base of $7,000. The employee earnings for the past year are: T. Borek $17,875, G. Hizny $2,250, A. McBean $18,550, C. Triebert $6,950. California, employers pay an Employment Training Tax (ETT) of 0.1% on all wages up to the first $7,000 of wages. What are the employer-share taxes for FUTA, SUTA, ETT(.1%), and FICA for the year? (ignore worker's compensation insurance) A) $4,859.13 B) $5,349.23 C) $5,108.31 D) $4,835.91 20. Electronic tax deposits are usually processed through the: A) AFTPS. B) ESTPF.

Chapter 6 quiz

21.

22.

23.

24.

25.

26.

C) EPS. D) EFTPS. The time period that the IRS uses to determine a firm's payroll tax deposit schedule is called the: A) Evaluation period. B) Tax lookback. C) Lookback period. D) Prior year. Van Buuren Enterprises had payroll tax liability of $42,450 during the lookback period. How frequently will the firm deposit its payroll taxes? A) Monthly B) Annually C) Semi-weekly D) Next Business Day What deposit schedule must all new employers follow (unless their payroll tax liability exceeds $100,000 on any pay date)? A) Annual B) Monthly C) Semi-weekly D) Next business day Van Oot's Bicycles had $19,489 of payroll tax liability during their lookback period. They pay their employees on a semimonthly basis. Assuming that no payday has a tax liability in excess of $100,000, when is their payroll tax deposit due? A) On the last day of the current month B) By the 10th of the following month C) By the 15th of the following month D) By the last day of the following month Kohlmeier Industries had $87,950 of annual payroll taxes during the lookback period. The firm pays its employees biweekly on Wednesdays. Assuming that no payday has a tax liability in excess of $100,000, when are the payroll tax deposits due? A) By the end of the current month B) Within two weeks of the pay date C) By Friday of the current week D) By Wednesday of the following week Hodgdon Industries, a semi-weekly schedule depositor, pays its employees semimonthly on the 1st and 15th of the month. Per company policy, employees are paid their annual bonuses on December 14, the final payday of the year for 2017. On Thursday, December 14, the bonuses were paid and the payroll tax liability was $103,850. When are the payroll tax deposits due for the December 14 pay date? A) Monday, December 18 B) Friday, December 22 C) Wednesday, December 20 D) Friday, December 15

Chapter 6 quiz 27. Andreosatos Enterprises has received a letter from the IRS that due to their tax liability of $1,950 during the lookback period, they are an annual depositor. Which tax form should they file to report their payroll taxes? A) Form 940 B) Form 945 C) Form 944 D) Form 941 28. Lesch & Sons has been and is currently a monthly schedule depositor. During the current year, they experienced an economic downturn during which the firm had to lay off all but one employee. Their payroll taxes have decreased to less than $500 per month. Which form should they file to reconcile their taxes? A) Form 944 B) Form 943 C) Form 942 D) Form 941 29. Patalano's Pros is a semi-weekly schedule depositor. Which forms must they file to reconcile their payroll taxes? A) Forms 940 and 944 B) Forms 941 and 944 C) Form 944 and Schedule B D) Form 941 and Schedule B 30. What amount should be entered in Column 1, Lines 5a and 5c? 140,328.00 on line 2(Assume no Section 125 health insurance and that none of the employees had exceeded the Social Security wage base.) A) $16,264.00 B) $140,328.00 C) $8,700.34 and $2,034.76, respectively D) $156,592.00 31. What amount should be entered in Column 2, Lines 5a and 5c? (Assume no Section 125 health insurance and that none of the employees had exceeded the Social Security wage base.) follow 30 A) $17,400.67 and $4,069.51, respectively B) $140,328.00 C) $8,700.34 and $2,034.76, respectively D) $156,592 32. What amounts belong in Column 2, Lines 5a and 5c? 67,248.00 on line 2 A) $4,169.38 and $1,950.19, respectively B) $4,169.28 and $975.19, respectively C) $8,338.75 and $1,950.19, respectively D) $8,338.75 and $975.19, respectively 33. What amount belongs on line 5e? follow 32 A) $67,248.00

Chapter 6 quiz

34.

35.

36.

37.

38.

39.

B) $8,338.75 C) $10,288.94 D) $5,860.00 Assuming that Daigneault Designs has no tipped employees, what amount belongs on line 6? Follow 32,33 A) $10,288.94 B) $16,148.94 C) $83,396.94 D) $20,577.89 Collin's Pool Service files a Form 944 to report its payroll tax liability. Line 5 had a total of $2,648.96. What amount belongs in box 13m? A) $2,500.00 B) $1,379.00 C) $2,649.00 D) $2,648.96 Collin's Pool Service files a Form 944 to report its payroll tax liability. Line 5 had a total of $2,648.96. Line 13m in Part 2 reported wages of $2,649.00. What needs to be done to reconcile the two amounts? A) $0.04 needs to be added via line 6 for the current year's adjustments. B) $0.04 needs to be subtracted via line 6 for the current year's adjustments. C) Nothing needs to be done because both totals are correctly computed. D) Change line 5 to match line 13m. Red's Waterworks is a semiweekly depositor. One month of the recent quarter's Schedule B had the following information: 12304.42, 12465.20, 14368.52, 17346.67. What is Red Waterworks' tax liability for Month 1? A) $29,811.87 B) $42,116.29 C) $56,484.81 D) $39,138.14 Cralic Company has 12 employees and operates in Texas. The Form 940 for the previous year contained the following information: What amount should be entered on line 5? (Assume that all employees had exceeded the FUTA wage base.) [255984.29 on line 3-84000 on line 7=171984.29 on line 6 – 12543.54 on line 4= 19440.75] A) $84,000.00 B) $1,535.91 C) $159,440.75 D) $1,031.91 Cralic Company has 12 employees and operates in Texas. The Form 940 for the previous year contained the following information: What amount should be entered on line 6? Follow 38 A) $184,527.83 B) $1,535.91 C) $171,984.29

Chapter 6 quiz D) $1,031.91 40. Cralic Company has 12 employees and operates in Texas. The Form 940 for the previous year contained the following information: What amount should be entered on line 8? A) $504.00 (84000 *0.006) B) $1,008.00 C) $1,535.91 D) $1,031.91 41. Which copy of Form W-2 should be retained by the employee? A) Copy 1 B) Copy D C) Copy 3 D) Copy C 42. Annabelle is employed as an administrator for GRM Industries. She noticed that her Box 1 and Box 3 amounts on her W-2 were different.imgWhat is a reason why the amounts in boxes 1 and 3 would be different? A) Annabelle received tips, which are not subject to Social Security taxes. B) Annabelle has contributed to a pre-tax 401(k) that reduced her taxable wages. C) Annabelle changed her withholding allowances on her W-4. D) Annabelle's wages were subject to a pre-tax garnishment. 43. Faith, the accountant for Harris's Meats, filed Form 941 for the first quarter on May 12. The amount of taxes due to be paid with Form 941 was $8,975. The first failure to file notice was dated May 5. What is the amount that must be remitted, including the IRS penalty for the failure to file? A) $8,975.00 B) $9,154.50 C) $9,423.75 D) $9,872.50 44. Which of the following is not an example of an employer's payroll-related business expense? A) Tax deposits and filings B) Voluntary deduction receipt C) Tax withholding and matching D) Employee compensation and accountability 45. The number of employees contained in the different departments of a company is known as the: A) Employee concentration. B) Department classification. C) Labor distribution. D) Company division. 46. Trick's Costumes has 65 employees, who are distributed as follows: design 12 ee, fabrication 30, purchasing 8, administration 10, sales 5. imgThe payroll-related costs for the year are $1,043,050. If Trick's Costumes does not use departmental classification, how much is allocated to each department? A) $153,910

Chapter 6 quiz

47.

48.

49.

50.

51.

52.

B) $202,850 C) $208,610 D) $260,763 Trick's Costumes has 65 employees, who are distributed as follows: design 12 ee imgThe payrollrelated costs for the year are $1,043,050. If Trick's Costumes does use departmental classification, how much is allocated to the Design department? (Do not round intermediate calculations. Round final answer to 2 decimal places.) A) $208,210.50 B) $192,563.08 (1043050/65*12=…) C) $128,375.38 D) $160,469.23 The payroll-related costs for the year are $1,043,050. Fabric 30 eeIf Trick's Costumes does use departmental classification, how much is allocated to the Fabrication department? (Do not round intermediate calculations. Round final answer to 2 decimal places.) A) $563,190.56 B) $401,173.10 C) $433,266.92 D) $481,407.69 (1043050/65*30=..) The payroll-related costs for the year are $1,043,050. If Trick's Costumes does use departmental classification, how much is allocated to the Purchasing 8 ee department? (Do not round intermediate calculations. Round final answer to 2 decimal places.) A) $128,375.38 B) $160,469.23 C) $176,516.15 D) $120,351.92 The payroll-related costs for the year are $1,043,050. If Trick's Costumes does use departmental classification, how much is allocated to the Administration department 10? (Do not round intermediate calculations. Round final answer to 2 decimal places.) A) $192,563.08 B) $240,703.85 C) $208,610.00 D) $160,469.23 The payroll-related costs for the year are $1,043,050. If Trick's Costumes does use departmental classification, how much is allocated to the Sales department 5? (Do not round intermediate calculations. Round final answer to 2 decimal places.) A) $101,429.78 B) $80,234.62 C) $64,187.69 D) $96,281.54 Which of the following best describes the function of a benefit analysis report? A) It is an analysis of the benefits paid to employees. B) It is an analysis of each employee's benefit package.

Chapter 6 quiz

53.

54.

55.

56.

57.

C) It is an analysis of the effect of labor costs on departmental profitability. D) It is an analysis of each department's benefit to the company. What factor is not included in an employee's total compensation report? A) Federal income tax deductions B) Paid time off like sick and vacation time C) Health and worker's compensation insurance premiums D) Bonuses and other incentive programs Leah works for Toffolon Technicians in New Hampshire, where she earns $30,000 annually. She contributes 3% to her 401(k), of which her employer matches 1.5%. Her employer contributes $200 per month for her health insurance, $50 per month for her life insurance, and $25 per month for her AD&D insurance. Toffolon Technicians pays employer-only taxes and insurance that comprises an additional 15% of Leah's annual salary. What is Leah's total annual compensation? A) $30,000 B) $34,445 C) $38,250 ((30,000*0.015)+(200*12)+(50*12)+(25*12)+(30,000*0.15)+30,000) D) $31,467 John works for Heinlein Hillclimbers in Wyoming, where he earns $26,500 annually. He contributes $150 per month to his 401(k), of which his employer matches half of his contribution. Heinlein Hillclimbers contributes $150 per month to his health insurance, $30 per month to his life insurance, and $50 per month to his AD&D policy. He receives a 2% profitsharing bonus at the end of each year and $5,250 in tuition reimbursement. Heinlein pays employer-only taxes and insurance that comprises an additional 18% of John's annual salary. What is John's total annual compensation? A) $26,500.00 B) $39,675.25 C) $40,710.00 ((26,500*0.02)+(26500*0.18)+(150*12)+(30*12)+(50*12)+(75*12) D) $39,633.25 Maeisha works for Brown Corporation, where she earns $45,000. Her employer contributes 1% of her pay to her pension fund and pays the following monthly amounts for her insurance: health, $300; life, $50; AD&D, $25. She receives $40 per month for her gym membership and receives a $400 bonus at the end of the year. Brown Corporation pays employer-only taxes and insurance that comprises an additional 12% of Maeisha's annual salary. What is Maeisha's total annual compensation? A) $56,230.00 B) $54,849.30 C) $50,766.80 D) $54,451.30 Cordelia is an employee of Snaktyme Foods in Missouri. She earns $24,000 annually. Snaktyme has provided uniforms worth $350 and training worth $850 as part of her employment. She contributes 4% to her 401(k), of which her employer matches half. Cordelia's employer pays the following monthly amounts toward her insurance: health, $125; life, $50; AD&D, $30. Snaktyme

Chapter 6 quiz

58.

59.

60.

61.

62.

63.

Foods pays employer-only taxes and insurance that comprises an additional 14% of Cordelia's annual salary. What is Cordelia's total annual compensation? A) $28,000 B) $31,500 C) $29,260 D) $32,900 Which of the following documents could contain annual compensation report data? (Select all that apply.) A) Employee earnings report B) Vendor invoices C) Payroll tax reports D) Employee questionnaires Which of the following tasks could use data from the Benefit Analysis Report? (Select all that apply.) A) Budgeting B) Benchmarking C) Departmental Reporting D) Labor Planning How might a business improve its operations by generating and reviewing a benefit analysis report? (Select all that apply.) A) Incorrect departmental labor distribution B) Awareness of employee-related costs C) Increased departmental profitability D) Well-designed budgets Francesca earns $2,400 per pay period. Compute the FICA taxes for both employee and employer share. What is the total FICA tax liability for Francesca's pay per pay period? (Assume that Francesca has not met the FICA wage base.) A) $297.60 B) $332.40 C) $218.40 D) $367.20 Jamie earns $232,000 annually. Compute the FICA taxes for both the employee and employer share. The Social Security wage base is $127,200. What is the total annual FICA tax liability for Jamie's pay? A) $22,788.80 B) $19,270.00 C) $18,160.00 D) $17,872.00 Anadama Painters has 15 employees and is located in South Dakota. The total wages for the last year was $389,458. What was the FUTA tax liability for the year? (Assume that all employees have exceeded the annual FUTA wage base of $7,000 per employee and that the FUTA rate is 0.6%.)

Chapter 6 quiz

64.

65.

66.

67.

68.

69.

70.

A) $608 B) $645 C) $630 D) $620 Deschutes Companies located in Oregon has a SUTA tax rate of 4.10% and a wage base of $36,900. During the last calendar year, the company paid $393,750 in wages and salaries for 11 employees. What is the total of the FUTA and SUTA tax liabilities for Deschutes Companies? (Assume that all employees have exceeded the FUTA and SUTA wage bases.) A) $17,103.90 B) $16,709.50 C) $18,323.40 D) $15,785.60 The payroll tax(es) for which an employer must match the entire amount of the employee's deduction include ________. A) FICA and Federal withholding tax. B) FUTA and SUTA. C) Social Security and Medicare (up to $127,200 and $200,000 in annual compensation respectively). D) Federal withholding tax. The IRS uses the ________ to determine how often a company must deposit payroll taxes. A) Previous year's payroll tax deposits B) Firm's income tax filings C) Lookback period D) Financial statements The form that employers use to report their quarterly Federal income tax liability is ________. A) Form 940 B) Form 944 C) Form 943 D) Form 941 The total of a firm's annual wages and salaries must match on Forms ________. A) W-2 and W-3 B) 940 and W-2 C) W-3 and 941 D) 941 and W-2 If an employer fails to make payroll tax deposits on time, the firm will be penalized if the IRS finds evidence of ________. A) Willful disregard B) Inadvertent negligence C) Incompetent reporting D) Mistaken analysis Employee expenses like benefits and other non-wage compensation may amount to at least another ________ of each employee's annual pay.

Chapter 6 quiz A) 40% B) 60% C) 70% D) 50% 71. _____ allows firms to allocate costs accurately among departments. A) Labor costing B) Labor distribution C) Compensation analysis D) Benefit analysis 72. A benefit analysis report may be compiled to reveal ________. A) Department profitability B) Employee productivity C) Labor distribution D) Departmental effectiveness 73. A(n) ________ reflects the total of salary/wages, bonuses, benefits, and employer paid costs in an employee's pay. A) Financial position report B) Employee analysis report C) Form EM-42 D) Total compensation report...