Question

q4

Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of $8738.00. The FICA tax for social security is 6.2% of the first $128,400 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The FUTA tax rate of 0.6% and the SUTA tax rate of 5.4% are applied to the first $7000 of an employee's pay. The amount of federal income tax withheld from her earnings was $1449.87. What is the total amount of taxes withheld from the Portia's earnings?  (Round your intermediate calculations to two decimal places.)

		$2552.33
		$1576.57
		$2172.00
		$2118.33
		$3621.87

Q5

A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts:

Accounts receivable	$	357,000​	debit
Allowance for uncollectible accounts		520​	debit
Net Sales		802,000​	credit

1. All sales are made on credit. Based on past experience, the company estimates 0.4% of net credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

		Debit Bad Debts Expense $1948; credit Allowance for Doubtful Accounts $1948.
		Debit Bad Debts Expense $3208; credit Allowance for Doubtful Accounts $3208.
		Debit Bad Debts Expense $3728; credit Allowance for Doubtful Accounts $3728.
		Debit Bad Debts Expense $1428; credit Allowance for Doubtful Accounts $1428.
		Debit Bad Debts Expense $2688; credit Allowance for Doubtful Accounts $2688.

Answer 1

4.

Portia's earnings = $8738

FICA tax for social security = 6.2%

FICA social security tax payable = Portia's earnings x FICA tax for social security

= 8,738 x 6.2%

= $541.76

FICA tax rate for Medicare =1.45%

FICA medicare tax payable = Portia's earnings x FICA tax for social security

= 8,738 x 1.45%

= $126.70

Federal income tax withheld from her earnings = $1449.87

Total amount of taxes withheld from the Portia's earnings =  FICA social security tax payable + FICA medicare tax payable -+ Federal income tax withheld from her earnings

= 541.76 + 126.70 + 1449.87

= $2,118.33

Fourth option is correct.

5.

Net Sales = $802,000

The company estimates 0.4% of net credit sales to be uncollectible

Bad debt expense = Net sales x Percentage uncollectible

= 802,000 x 0.4%

= $3,208

The following adjusting entry the company should make at the end of the current year to record its estimated bad debts expense:

Debit Bad Debts Expense $3208; credit Allowance for Doubtful Accounts $3208

Second option is correct.