Question

1 - Peavey Enterprises purchased a depreciable asset for $25,500 on April 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $2,700, what will be the amount of accumulated depreciation on this asset on December 31, Year 3?

Multiple Choice

$19,000

$5,700

$22,800

$15,675

$4,750

2- During the first week of January, an employee works 49 hours. For this company, workers earn 150% of their regular rate for hours in excess of 40 per week. Her pay rate is $20 per hour, and her wages are subject to no deductions other than FICA Social Security, FICA Medicare, and federal income taxes. The tax rate for Social Security is 6.2% of the first $118,500 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee’s pay. The employee has $83 in federal income taxes withheld. What is the amount of this employee’s gross pay for the first week of January?

Multiple Choice

$1,010

$1,070

$1,470

$1,528

$1,370

3 - The chief executive officer earns $22,000 per month. As of May 31, her gross pay was $110,000. The tax rate for Social Security is 6.2% of the first $118,500 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee’s pay. What is the amount of FICA- Social Security withheld from this employee for the month of June?

Multiple Choice

$7,347.00

$527.00

$1,364.00

$123.25

$319.00

4- The chief executive officer earns $20,500 per month. As of May 31, her gross pay was $102,500. The tax rate for Social Security is 6.2% of the first $118,500 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee’s pay. What is the amount of FICA - Medicare withheld from this employee for the month of June?

Multiple Choice

$7,347.00

$992.00

$1,271.00

$232.00

$297.25

Answer 1

1
Depreciation for Year 1 =(25500-2700)/4/12*9= $4275
Depreciation for Year 2 and 3 =(25500-2700)/4= $5700
Accumulated depreciation on December 31, Year 3 = 4275+5700+5700= $15675
2
Gross pay = (40*20)+(9*20*150%)= $1070
3
FICA- Social Security = (118500-110000)*6.2%= $527
4
FICA - Medicare = 20500*1.45%= $297.25