Question

6. An employee receives an hourly rate of $17.00, with time and a half for all hours worked in excess of 40 during the week. Payroll data for the first week of the calendar year are as follows: hours worked, 46.00 federal income tax withheld, $132.00; Social security tax rate, 6% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings; state unemployment compensation tax, 3.4% on the first $7,000; federal unemployment compensation tax, .8% on the first $7,000. What is the net amount to be paid the employee? If required, round your answers to the nearest cent.

Select the correct answer.

$587.53

$833.00

$1,173.00

$638.53

7. On January 1 of the current year, the Queen Corporation issued 12% bonds with a face value of $62,000. The bonds are sold for $60,140. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, five years from now. Queen records straight-line amortization of the bond discount. Determine the bond interest expense for the year ended December 31.

Select the correct answer.

$7,812

$7,440

$620

$1,860

8. The Marx Company issued $78,000 of 9% bonds on April 1 of the current year at face value. The bonds pay interest semiannually on January 1 and July 1. The bonds are dated January 1, and mature in five years, on January 1. Determine the total interest expense related to these bonds for the current year ending on December 31.

Select the correct answer.

$7,020

$585

$3,510

$5,265

9. On January 1, the Kings Corporation issued 10% bonds with a face value of $111,000. The bonds are sold for $108,780. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, ten years from now. Kings records straight-line amortization of the bond discount. Determine the bond interest expense for the year ended December 31 of the first year is.

Select the correct answer.

$2,220

$10,878

$11,322

$11,100

10. A corporation issues $83,000, 8%, 5-year bonds on January 1, for $86,740. Interest is paid semiannually on January 1 and July 1. If the corporation uses the straight-line method of amortization of bond premium, determine the amount of bond interest expense to be recognized on July 1.

Select the correct answer.

$3,694

$6,640

$2,946

$3,320

Answer 1

6.)	Earning for 40 hours	680.00	=40*17
	Add :Overtime earnings	153.00	=6*17*1.5
	Gross earnings	833.00
	Less: Federal Income Tax	132.00
	Less: Social Security Tax	49.98	=833*6%
	Less: Medicare tax	12.50	=833*1.5%
	Net Pay	$ 638.53
	Correct answer is option 4 ( i.e. $ 638.53 ).
7.)	Cash Payment of Interest	7,440	=62000*12%
	Add: Amortization of Bond Discount	372	=(62000-60140)*2/10
	Bond Interest Expense for the year	$ 7,812
	Correct answer is option 1 ( i.e. $ 7,812 ).
8.)	Total Interest expense for current year	$ 5,265	=78000*9%*9/12
	Correct answer is option 4 ( i.e. $ 5,265 ).
9.)	Cash Payment of Interest	11,100	=111000*10%
	Add: Amortization of Bond Discount	222	=(111000-108780)*2/20
	Bond Interest Expense for the year	$ 11,322
	Correct answer is option 3 ( i.e. $ 11,322 ).
10.)	Cash Payment of Interest	3,320	=83000*8%*1/2
	Less: Premium amortization of Bond	374	=(86740-83000)/10
	Bond Interest Expense for the year	$ 2,946
	Correct answer is option 3 ( i.e. $2,946 ).