1. Which of the following taxes is not included in the payroll tax expense of the employer? |
C-Federal Income Taxes |
Vacation Pay-$110,000 In its December 31 balance sheet, what amount should Morgan report as its liability for compensated absences? |
D-$190,000 |
Evans Inc., pays its managers a bonus consisting of 7% of net income (income after deduction of both bonus and income taxes). The company's income tax rate is 20%. Income for the current year is $600,000. How much bonus would be paid for the current year (rounded to whole dollars)? |
B-$31,818 |
Dorman Corporation has an incentive compensation plan under which the sales manager receives a bonus equal to 10% of the company's income after deducting income taxes but before deducting the bonus. Income before income tax and the bonus is $80,000. The effective income tax rate is 40%. How much is the bonus? |
B-$5,000 .10 ($80,000 - T); T = .40 ($80,000 - B); Substitute T in the Bonus equation: B = .10 ($80,000 - .40 ($80,000 - B); B = $5,000 |
Which of the following payroll taxes are paid by the employer? |
D-All of these |
Which of the following accounting principles best describes the rationale for reporting a liability for earned but unused compensated absences? |
D-Matching |
Which of the following statements characterizes defined benefit plans? |
D-All of these |
Washington Corporation provides an incentive compensation plan under which its president is to receive a bonus equal to 10 percent of Washington's income in excess of $100,000 before deducting income tax but after deducting bonus. If income before income tax and bonus is $320,000 and the effective tax rate is 40 percent, the amount of the bonus should be |
b-$20,000 |
Which of the following statements characterizes defined contribution plans? |
C-The employer's obligation is satisfied by making the appropriate amount of periodic contribution. |
The vested benefits of an employee in a pension plan represent benefits |
C-that are not contingent on the employee's continuing in the service of the employer. |
Which of the following is not an issue in accounting for defined benefit plans? |
B- The amount of funding(contributions) required by the plan |
The projected benefit obligation is the measure of pension obligation that |
D-Is the only allowable estimate for reporting the service cost component of pension expense. |
The disclosure required for postretirement benefit plans includes all requirements for pension plans plus: |
A-information about health cost trend assumptions and sensitivity analysis of how postretirement expenses and the postretirement obligation would vary if the health care costs trend rate were increased by 1%. |
The interest cost component for other postretirement benefits is determined using |
C-Both of these |