Test Bank for Payroll Accounting 2021, 7th Edition, Jeanette Landin, Paulette Schirmer

Test Bank for Payroll Accounting 2021, 7th Edition,

Jeanette Landin, Paulette Schirmer

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Student name:__________
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) Mandatory employer-paid payroll taxes are known as statutory deductions.
⊚ true
⊚ false

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.
⊚ true
⊚ false

3) FUTA tax rates vary from state to state.

⊚ true
⊚ false

4) A firm's frequency of payroll tax deposits is determined by its payroll tax liability during
the lookback period.
⊚ true
⊚ false

5) A firm that had $55,650 in annual payroll tax liability during the lookback period will be
a monthly schedule depositor.
⊚ true
⊚ false

6) An employer files Form 941 on either a quarterly basis or when they deposit payroll
taxes, whichever is more frequent.
⊚ true
⊚ false

7) Schedule B must accompany Form 941 for a firm classified as a semi-weekly payroll tax
depositor.

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 ⊚ true
⊚ false

8) Form 940 is the report of tax liability for monthly schedule depositors.
⊚ true
⊚ 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.
⊚ true
⊚ false

10) Employers who inadvertently fail to file quarterly or annual reports may be subject to
monetary penalties.
⊚ true
⊚ false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
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

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13) On a recent paycheck, Mayim’s taxes were as follows: Federal withholding, $36; Social
Security tax, $39.94; Medicare, $9.70; and state income tax, $11.70. What is the employer’s
share for these taxes?

A) $97.34
B) $61.34
C) $49.64
D) $39.94

14) 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

15) Jeremiah is a full-time exempt employee who earns an annual salary of $310,000. What
is the employer’s annual FICA tax responsibility for Jeremiah’s salary, based on an annual Social
Security tax wage base of $137,700?

A) $13,032.40
B) $4,537.00
C) $23,715.00
D) $23,850.00

16) 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 $137,700?

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 A) $11,654.90
B) $10,506.50
C) $16,447.50
D) $16,582.50

17) Johnny’s Tavern had 16 employees and total annual wages of $412,948 during the
previous year. All employees earned more than $7,000 during the year. What is Johnny’s
Tavern’s FUTA tax liability?

A) $24,776.88
B) $1,805.69
C) $7,000.00
D) $672.00

18) 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

19) PCD Incorporated operates as a Nevada business. The SUTA wage base for Nevada is
$32,500. PCD Inc.’s SUTA tax rate is 4.5%. The employees’ annual earnings for the past
calendar year are as follows: Annabelle $37,150, Beatrice $25,080, Michael $42,800, Howard
$26,700.
What is PCD Inc.’s SUTA tax liability for the year?

A) $5,927.85
B) $5,255.10
C) $6,100.82
D) $4,796.72

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20) PCD Incorporated operates as a Nevada business. The SUTA wage base for Nevada is
$32,500. 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) $5,237.10
C) $6,037.82
D) $4,733.72

21) Timechex operates as a Nevada business. The employees’ annual earnings for the past
calendar year are as follows: Will, $29,840: Adalia, $36,486: Brian, $20,590; and Amanda,
$5,000.
What is Timechex's FUTA tax liability for the year?

A) $28,000
B) $26,200
C) $120
D) $156

22) 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

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23) Dena’s Decorations is a South Carolina business that has a SUTA rate of 3.60% and an
annual SUTA wage base of $14,000. The employee earnings for the past calendar year are: B.
Gilfilan $24,980, P. Laubach $40,490, S. Loftin $18,120, M. Moravec $11,240. (Assume that all
employees have exceeded the annual FUTA wage base of $7,000 per employee and that the
FUTA rate is 0.6%.)
What are the FUTA and SUTA tax liabilities for Dena’s Decorations?

A) FUTA $1,736.60; SUTA $531.36

B) FUTA $1,736.60; SUTA $168
C) FUTA $531.36; SUTA $2,152.98
D) FUTA $168; SUTA $1,916.64

24) 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. (Assume that all
employees have exceeded the annual FUTA wage base of $7,000 per employee and that the
FUTA rate is 0.6%.)

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

25) 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 $18,575, G. Hizny $3,250,
A. McBean $19,850, C. Triebert $5,950. California, employers pay an Employment Training
Tax (ETT) of 0.1% on all wages up to the first $7,000 of wages.
What is the total of the employer-share taxes for FUTA, SUTA, ETT (0.1%), and FICA for the
year? (ignore worker’s compensation insurance). (Round your intermediate calculations to 2
decimal places.)

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 A) $5,012.13
B) $8,642.22
C) $5,401.30
D) $5,128.18

26) 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 is the total of the employer-share taxes for FUTA, SUTA, ETT (0.1%), and FICA for the
year? (ignore worker's compensation insurance). (Round your intermediate calculations to 2
decimal places.)

A) $4,859.13
B) $5,349.23
C) $5,108.31
D) $4,835.91

27) Electronic tax deposits are usually processed through the:

A) AFTPS.
B) ESTPF.
C) EPS.
D) EFTPS.

28) 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.

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29) Van Buren Enterprises had payroll tax liability of $42,450 during the lookback period.
How frequently must the firm deposit its payroll taxes?

A) Monthly
B) Annually
C) Semi-weekly
D) Next Business Day

30) 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

31) Van Oot's Bicycles had $19,489 of payroll tax liability during their lookback period.
They pay their employees on a monthly basis. Assuming that no payday has a tax liability in
excess of $100,000, when is their payroll tax deposit due?

A) By 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

32) 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

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33) 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 24, the final payday of the year for 2020. On Thursday, December 24, the bonuses
were paid and the payroll tax liability was $103,850. When are the payroll tax deposits due for
the December 24 pay date?

A) Monday, December 28
B) Friday, December 25
C) Wednesday, December 30
D) Friday, January 1

34) 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

35) 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

36) Patalano’s Pros is a semi-weekly schedule depositor. Which forms must they file to
reconcile their payroll taxes?

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 A) Forms 940 and 944
B) Forms 941 and 944
C) Form 944 and Schedule B
D) Form 941 and Schedule B

37) 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.

38) Which copy of Form W-2 should be retained by the employee?

A) Copy 1
B) Copy D
C) Copy 3
D) Copy C

39) 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.
b Employer identification 1 Wages, tips, other 2 Federal income
number (EIN) compensation tax withheld
c Employer's name, address, 3 Social security wages 4 Social security
and ZIP code tax withheld
What 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.

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40) 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 $11,475. The first failure to file notice
was dated May 5. What is the amount that must be remitted, including the Internal Revenue
Service (IRS) penalty for the failure to file?

A) $11,475.00
B) $11,704.50
C) $12,048.75
D) $12,622.50

41) 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

42) 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

43) The number of employees contained in the different departments of a company is known
as the:

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 A) Employee concentration.
B) Department classification.
C) Labor distribution.
D) Company division.

44) Trick’s Costumes has 65 employees, who are distributed as follows:

Design 12 employees
Fabrication 30 employees
Purchasing 8 employees
Administration 10 employees
Sales 5 employees
The payroll-related costs for the year are $1,123,050. If Trick’s Costumes does not use
departmental classification, how much is allocated to each department?

A) $169,910
B) $218,850
C) $224,610
D) $280,763

45) Trick's Costumes has 65 employees, who are distributed as follows:

Design 12 employees
Fabrication 30 employees
Purchasing 8 employees
Administration 10 employees
Sales 5 employees
The 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
B) $202,850
C) $208,610
D) $260,763

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46) Trick’s Costumes has 90 employees, who are distributed as follows:

Design 17 employees
Fabrication 35 employees
Purchasing 13 employees
Administration 15 employees
Sales 10 employees
The payroll-related costs for the year are $1,263,050. 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) $252,610.50
B) $238,576.11
C) $182,440.56
D) $210,508.33

47) Trick's Costumes has 65 employees, who are distributed as follows:

Design 12 employees
Fabrication 30 employees
Purchasing 8 employees
Administration 10 employees
Sales 5 employees
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 Design department? (Do not round intermediate
calculations. Round final answer to 2 decimal places.)

A) $208,210.50
B) $192,563.08
C) $128,375.38
D) $160,469.23

48) Trick’s Costumes has 90 employees, who are distributed as follows:

Design 17 employees
Fabrication 35 employees
Purchasing 13 employees
Administration 15 employees
Sales 10 employees

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The payroll-related costs for the year are $1,093,050. If 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) $506,857.87
B) $344,840.41
C) $376,934.23
D) $425,075.00

49) Trick's Costumes has 65 employees, who are distributed as follows:

Design 12 employees
Fabrication 30 employees
Purchasing 8 employees
Administration 10 employees
Sales 5 employees
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 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

50) Trick’s Costumes has 75 employees, who are distributed as follows:

Design 14 employees
Fabrication 32 employees
Purchasing 10 employees
Administration 12 employees
Sales 7 employees
The payroll-related costs for the year are $1,063,050. If Trick’s Costumes does use departmental
classification, how much is allocated to the Purchasing department? (Do not round
intermediate calculations. Round final answer to 2 decimal places.)

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 A) $133,716.54
B) $186,134.92
C) $141,740.00
D) $170,088.00

51) Trick's Costumes has 65 employees, who are distributed as follows:

Design 12 employees
Fabrication 30 employees
Purchasing 8 employees
Administration 10 employees
Sales 5 employees
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 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

52) Trick’s Costumes has 65 employees, who are distributed as follows:

Design 12 employees
Fabrication 30 employees
Purchasing 8 employees
Administration 10 employees
Sales 5 employees
The payroll-related costs for the year are $1,123,050. If Trick’s Costumes does use departmental
classification, how much is allocated to the Administration department? (Do not round
intermediate calculations. Round final answer to 2 decimal places.)

A) $207,332.31
B) $259,165.38
C) $224,610.00
D) $172,776.92

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53) Trick's Costumes has 65 employees, who are distributed as follows:
Design 12 employees
Fabrication 30 employees
Purchasing 8 employees
Administration 10 employees
Sales 5 employees
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? (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

54) Trick’s Costumes has 80 employees, who are distributed as follows:

Design 15 employees
Fabrication 33 employees
Purchasing 11 employees
Administration 13 employees
Sales 8 employees
The payroll-related costs for the year are $1,243,050. If Trick’s Costumes does use departmental
classification, how much is allocated to the Sales department? (Do not round intermediate
calculations. Round final answer to 2 decimal places.)

A) $144,991.37
B) $124,305.00
C) $108,766.88
D) $139,843.13

55) Trick's Costumes has 65 employees, who are distributed as follows:

Design 12 employees
Fabrication 30 employees
Purchasing 8 employees

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Administration 10 employees
Sales 5 employees
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? (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

56) 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.
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.

57) What factor is not included in an employee's total compensation report?

A) Federal income tax deductions

B) Paid time off such as sick and vacation time
C) Health and worker's compensation insurance premiums
D) Bonuses and other incentive programs

58) Leah works for Toffolon Technicians in New Hampshire, where she earns $29,400
annually. She contributes 3.5% to her 401(k), of which her employer matches 1.75%. Her
employer contributes $150 per month for her health insurance, $40 per month for her life
insurance, and $30 per month for her AD&D insurance. Toffolon Technicians pays employer-
only taxes and insurance that comprise an additional 17% of Leah’s annual salary. What is
Leah’s total annual compensation?

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 A) $29,400.00
B) $38,581.50
C) $37,552.50
D) $36,523.50

59) 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 comprise an additional 15% of Leah’s annual salary. What is Leah’s total annual
compensation?

A) $30,000
B) $34,445
C) $38,250
D) $31,467

60) John works for Heinlein Hillclimbers in Wyoming, where he earns $25,600 annually. He
contributes $160 per month to his 401(k), of which his employer matches half of his
contribution. Heinlein Hillclimbers contributes $160 per month to his health insurance, $40 per
month to his life insurance, and $35 per month to his AD&D policy. He receives a 1% profit-
sharing bonus at the end of each year and $4,580 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) $37,655.45
B) $25,600.00
C) $38,824.00
D) $37,867.25

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61) 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% profit-
sharing 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
D) $39,633.25

62) Maeisha works for Brown Corporation, where she earns $53,900. Her employer
contributes 1% of her pay to her pension fund and pays the following monthly amounts for her
insurance: health, $200; life, $50; AD&D, $40. She receives $80 per month for her gym
membership and receives a $380 bonus at the end of the year. Brown Corporation pays
employer-only taxes and insurance that comprises an additional 15% of Maeisha’s annual salary.
What is Maeisha’s total annual compensation?

A) $67,344.00
B) $63,768.50
C) $61,796.20
D) $62,923.10

63) 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

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64) Cordelia is an employee of Snaktyme Foods in Missouri. She earns $21,700 annually.
Snaktyme has provided uniforms worth $200 and training worth $890 as part of her employment.
She contributes 2% to her 401(k), of which her employer matches half. Cordelia’s employer pays
the following monthly amounts toward her insurance: health, $125; life, $30; AD&D, $20.
Snaktyme 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) $24,995
B) $28,145
C) $26,375
D) $29,918

65) 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 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

66) Francesca earns $2,400 per pay period. Compute the FICA taxes for both employee and
employer share. What is the total of the employee- and employer-share of FICA tax liabilities 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

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67) Jamie earns $232,000 annually. Compute the FICA taxes for both the employee and
employer share. The Social Security wage base is $137,700. What is the total employee- and
employer-share of annual FICA tax liability for Jamie's pay?

A) $23,831.60
B) $24,270.50
C) $23,160.30
D) $22,872.60

68) 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%.)

A) $608
B) $645
C) $630
D) $620

69) Deschutes Companies located in Oregon has a SUTA tax rate of 4.10% and a wage base
of $42,100. 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) $19,449.10
B) $18,709.50
C) $18,323.40
D) $19,785.60

70) The payroll tax(es) for which an employer must match the entire amount of the
employee's deduction include ________.

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 A) FICA and Federal withholding tax. (up to $137,700 and $200,000 in annual
compensation, respectively, for FICA)
B) FUTA and SUTA
C) Social Security and Medicare taxes. (up to $137,700 and $200,000 in annual
compensation, respectively)
D) Federal withholding tax

71) 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

72) 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

73) 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

74) If an employer fails to make payroll tax deposits on time, the firm will be penalized if the
IRS finds evidence of ________.

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 A) Willful disregard
B) Inadvertent negligence
C) Incompetent reporting
D) Mistaken analysis

75) Employee expenses like benefits and other non-wage compensation may amount to at
least another ________ of each employee's annual pay.

A) 40%
B) 60%
C) 70%
D) 50%

76) ________ allows firms to allocate costs accurately among departments.

A) Labor costing
B) Labor distribution
C) Compensation analysis
D) Benefit analysis

77) A benefit analysis report may be compiled to reveal ________.

A) Department profitability
B) Employee productivity
C) Labor distribution
D) Departmental effectiveness

78) A(n) ________ reflects the total of salary/wages, bonuses, benefits, and employer paid
costs in an employee's pay.

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 A) Financial position report
B) Employee analysis report
C) Form EM-42
D) Total compensation report

79) Due the COVID-19 pandemic, employers were granted a refundable tax credit of up to
________ of wages paid between April 2, 2020 and December 31, 2020.

A) 25%
B) 40%
C) 50%
D) 60%

80) Due to the COVID-19 pandemic, employers with fewer than ________ employees were
granted a payroll tax credit.

A) 100
B) 200
C) 300
D) 400

81) Due to the COVID-19 pandemic, employers with fewer than 100 employees were granted
a payroll tax credit of up to ________ per employee, including fringe benefits.

A) $5,000
B) $10,000
C) $15,000
D) $20,000

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Answer Key

Test name: Test6

1) TRUE
2) FALSE
Employers are not responsible for paying a portion of federal income
tax.
3) FALSE
The FUTA tax rate is the same for all employers.
4) TRUE
5) FALSE
Firms that exceed $50,000 in payroll tax liability during the lookback
period are semi-weekly depositors.
6) FALSE
Form 941 is filed on a quarterly basis.
7) TRUE
8) FALSE
Form 940 is the Employer's Annual Federal Unemployment (FUTA)
Tax Return.
9) FALSE
Form W-3 is the Transmittal of Wage and Tax Statements.
10) TRUE
11) C
12) B
13) C
Social Security Tax Medicare Tax Total employer liability
$ 39.94 $ 9.70 $ 49.64
14) C
Social Security Tax Medicare Tax Total employer liability
$ 35.94 $ 8.90 $ 44.84

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15) A
Social Social Social Medicare Medicare Medicare Total
Security Security Security taxable tax tax employer
taxable tax rate tax income rate liability liability
income liability
$ 6.2% 8,537.40 $ 1.45% $ 4,495.00 $
137,700.00 310,000.00 13,032.40
16) A
Social Social Social Medicare Medicare Medicare Total
Security Security Security taxable tax tax employer
taxable tax rate tax income rate liability liability
income liability
$ 6.2% 8,537.40 $ 1.45% $ 3,117.50 $
137,700.00 215,000.00 11,654.90
17) D
Total employee Number of FUTA taxable FUTA tax Total employer
income employees income per rate FUTA liability
employee
$ 412,948.00 16 $ 7,000.00 0.6% $ 672.00
18) D
Total employee Number of FUTA taxable FUTA tax Total employer
income employees income per rate FUTA liability
employee
$376,948.00 16 $7,000.00 0.6% $672.00
19) B
Employee Total income NV SUTA SUTA taxable SUTA rate SUTA tax
wage base income liability
Annabelle $37,150.00 $32,500 $32,500.00 4.50% $1,462.50
Beatrice $25,080.00 $32,500 $25,080.00 4.50% $1,128.60
Michael $42,800.00 $32,500 $32,500.00 4.50% $1,462.50
Howard $26,700.00 $32,500 $26,700.00 4.50% $1,201.50
Total SUTA liability $5,255.10

20) B
Employee Total income NV SUTA SUTA SUTA SUTA tax
wage base taxable rate liability
income
Annabelle $ 36,750.00 $ 32,500 $ 32,500.00 4.50% $ 1,462.50
Beatrice $ 24,880.00 $ 32,500 $ 24,880.00 4.50% $ 1,119.60
Michael $ 42,200.00 $ 32,500 $ 32,500.00 4.50% $ 1,462.50

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 Howard $ 26,500.00 $ 32,500 $ 26,500.00 4.50% $ 1,192.50
Total SUTA liability $ 5,237.10

21) D
Employee Total income FUTA taxable FUTA rate FUTA tax
income liability
Will $ 29,840.00 $ 7,000.00 0.6% $ 42.00
Adalia $ 36,486.00 $ 7,000.00 0.6% $ 42.00
Brian $ 20,590.00 $ 7,000.00 0.6% $ 42.00
Amanda $ 5,000.00 $ 5,000.00 0.6% $ 30.00
Total FUTA liability $ 156.00

22) D
Employee Total income FUTA taxable FUTA rate FUTA tax
income liability
Will $ 28,440.00 $ 7,000.00 0.6% $ 42.00
Adalia $ 35,786.00 $ 7,000.00 0.6% $ 42.00
Brian $ 18,490.00 $ 7,000.00 0.6% $ 42.00
Amanda $ 6,500.00 $ 6,500.00 0.6% $ 39.00
Total FUTA liability $ 165.00

23) D
Employee Total income SUTA wage SUTA rate SUTA Tax FUTA tax
base
B. Gilfilan $ $ 14,000.00 3.60% $ 504.00 $ 42.00
24,980.00
P. Laubach $ $ 14,000.00 3.60% $ 504.00 $ 42.00
40,490.00
S. Loftin $ $ 14,000.00 3.60% $ 504.00 $ 42.00
18,120.00
M. Moravec $ $ 14,000.00 3.60% $ 404.64 $ 42.00
11,240.00
Total SUTA and FUTA tax liability $ $ 168.00
1,916.64

24) B
Employee Total SUTA wage SUTA rate SUTA tax FUTA tax
income base
B. Gilfilan $ 22,180.00 $ 14,000.00 3.60% $ 504.00 $ 42.00
P. Laubach $ 37,690.00 $ 14,000.00 3.60% $ 504.00 $ 42.00
S. Loftin $ 15,320.00 $ 14,000.00 3.60% $ 504.00 $ 42.00
M. Moravec $ 9,840.00 $ 14,000.00 3.60% $ 354.24 $ 42.00

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 Total SUTA and FUTA tax liability $ 1,866.24 $ 168.00

25) A
Employee Total income SUTA/ETT SUTA
Wage base rate
(1) T. Borek $ 18,575.00 $ 7,000.00 5.2%
(2) G. Hizny $ 3,250.00 $ 7,000.00 5.2%
(3) A. $ 19,850.00 $ 7,000.00 5.2%
McBean
(4) C. $ 5,950.00 $ 7,000.00 5.2%
Triebert
SUTA Tax FUTA Tax ETT Tax FICA Total
Employer
taxes
(1) $ 364.00 $ 42.00 $ 7.00 $ $1,833.99
1,420.99
(2) $ 169.00 $ 19.50 $ 3.25 $ 248.63 $ 440.38
(3) $ 364.00 $ 42.00 $ 7.00 $ $ 1,931.53
1,518.53
(4) $ 309.40 $ 35.70 $ 5.95 $ 455.18 $ 806.23
$ 1,206.40 $ 139.20 $ 23.20 $ $ 5,012.13
3,643.33

26) A
Employee Total SUTA/ETT SUTA
income Wage base rate
(1) T. Borek $ 17,875.00 $ 7,000.00 5.2%
(2) G. Hizny $ 2,250.00 $ 7,000.00 5.2%
(3) A. McBean $ 18,550.00 $ 7,000.00 5.2%
(4) C. $ 6,950.00 $ 7,000.00 5.2%
Triebert
SUTA Tax FUTA tax ETT Tax FICA Total
Employer
taxes
(1) $ 364.00 $ 42.00 $ 7.00 $ $
1,367.44 1,780.44
(2) $ 117.00 $ 13.50 $ 2.25 $ 172.13 $ 304.88
(3) $ 364.00 $ 42.00 $ 7.00 $ $
1,419.08 1,832.08
(4) $ 361.40 $ 41.70 $ 6.95 $ 531.68 $ 941.73
$ 1,206.40 $ 139.20 $ 23.20 $ $
3,490.33 4,859.13

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27) D
28) C
29) A
30) B
31) C
32) D
33) A
34) C
35) D
36) D
37) A
38) D
39) B
40) D
Tax Due # of Failure Failure Failure Failure Total Total to be
days to to to file to file penalties remitted
late deposit deposit penalty penalty due
penalty penalty rate
rate
$ 12 5% $ 5% $ $ $
11,475.00 573.75 573.75 1,147.50 12,622.50
41) D
Tax Due # of Failure Failure Failure Failure Total Total to
to to to to be
days file file penalties
deposit deposit due remitted
late penalty penalty
penalty penalty rate
rate
$ 12 5% $ 5% $ $ 897.50 $
8,975.00 448.75 448.75 9,872.50
42) B
43) C
44) C
Total labor costs Number of Cost per department
departments

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 $ 1,123,050.00 5 $ 224,610.00
45) C
Total labor costs Number of Cost per department
departments
$ 1,043,050.00 5 $ 208,610.00
46) B
Total labor Total # of Cost per # of employees Cost allocated
costs employees employee in department to department
$ 90 $ 14,033.89 17 $ 238,576.11
1,263,050.00
47) B
Total labor Total # of Cost per # of employees Cost
costs employees employee in department allocated
to
department
$ 1,043,050.00 65 $ 16,046.92 12 $ 192,563.08
48) D
Total labor Total # of Cost per # of employees Cost allocated
costs employees employee in department to department
$ 90 $ 12,145.00 35 $ 425,075.00
1,093,050.00
49) D
Total labor Total # of Cost per # of employees Cost
costs employees employee in department allocated
to
department
$ 1,043,050.00 65 $ 16,046.92 30 $ 481,407.69
50) C
Total labor Total # of Cost per # of employees Cost allocated
costs employees employee in department to department
$ 75 $ 14,174.00 10 $ 141,740.00
1,063,050.00
51) A
Total labor Total # of Cost per # of Cost
costs employees employee employees allocated
in to
department department
$ 1,043,050.00 65 $ 16,046.92 8 $ 128,375.38
52) D

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 Total labor Total # of Cost per # of employees Cost allocated
costs employees employee in department to department
$ 65 $ 17,277.69 10 $ 172,776.92
1,123,050.00
53) D
Total labor Total # of Cost per # of employees Cost allocated
costs employees employee in department to department
$ 65 $ 16,046.92 10 $
1,043,050.00 160,469.23
54) B
Total labor Total # of Cost per # of Cost
costs employees employee employees in allocated to
department department
$ 1,243,050.00 80 $ 15,538.12 8 $ 124,305.00
55) B
Total labor Total # of Cost per # of Cost
costs employees employee employees allocated
in to
department department
$ 65 $ 16,046.92 5 $
1,043,050.00 80,234.62
56) C
57) A
58) C
Employer contribution Monthly Annual
Annual earnings $ 29,400.00

Employer match 401(k) $ 514.50

Health Insurance $ 150.00 $ 1,800.00

Life Insurance $ 40.00 $ 480.00
AD&D Insurance $ 30.00 $ 360.00
Additional Taxes $ 4,998.00

Total Compensation $ 37,552.50

59) C
Employer contribution Monthly Annual
Annual earnings $ 30,000.00

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 Employer match 401(k) $ 450.00

Health Insurance $ 200.00 $ 2,400.00

Life Insurance $ 50.00 $ 600.00
AD&D Insurance $ 25.00 $ 300.00
Additional Taxes $ 4,500.00

Total Compensation $ 38,250.00

60) C
Employer contribution Monthly Annual
Annual earnings $ 25,600.00

Employer match 401(k) $ 80.00 $ 960.00

Health Insurance $ 160.00 $ 1,920.00
Life Insurance $ 40.00 $ 480.00
AD&D Insurance $ 35.00 $ 420.00
Profit-sharing bonus $ 256.00

Tuition Reimbursement $ 4,580.00

Additional Taxes $ 4,608.00

Total Compensation $ 38,824.00

61) C
Employer contribution Monthly Annual
Annual earnings $ 26,500.00

Employer match 401(k) $ 75.00 $ 900.00

Health Insurance $ 150.00 $ 1,800.00
Life Insurance $ 30.00 $ 360.00
AD&D Insurance $ 50.00 $ 600.00
Profit-sharing bonus $ 530.00

Tuition Reimbursement $ 5,250.00

Additional Taxes $ 4,770.00

Total Compensation $ 40,710.00

62) A

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 Employer contribution Monthly Annual
Annual earnings $ 53,900.00

Pension fund $ 539.00

Health Insurance $ 200.00 $ 2,400.00

Life Insurance $ 50.00 $ 600.00
AD&D Insurance $ 40.00 $ 480.00
Profit-sharing bonus $ 380.00

Gym membership $ 80.00 $ 960.00

Additional Taxes $ 8,085.00

Total Compensation $ 67,344.00

63) A
Employer contribution Monthly Annual
Annual earnings $ 45,000.00

Pension fund $ 450.00

Health Insurance $ 300.00 $ 3,600.00

Life Insurance $ 50.00 $ 600.00
AD&D Insurance $ 25.00 $ 300.00
Profit-sharing bonus $ 400.00

Gym membership $ 40.00 $ 480.00

Additional Taxes $ 5,400.00

Total Compensation $ 56,230.00

64) B
Employer contribution Monthly Annual
Annual earnings $ 21,700.00

Uniforms $ 200.00

Training $ 890.00

401(k) $ 217.00

Health Insurance $ 125.00 $ 1,500.00

Life Insurance $ 30.00 $ 360.00

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 AD&D Insurance $ 20.00 $ 240.00
Additional Taxes $ 3,038.00

Total Compensation $ 28,145.00

65) B
Employer contribution Monthly Annual
Annual earnings $ 24,000.00

Uniforms $ 350.00

Training $ 850.00

401(k) $ 480.00

Health Insurance $ 125.00 $ 1,500.00

Life Insurance $ 50.00 $ 600.00
AD&D Insurance $ 30.00 $ 360.00
Additional Taxes $ 3,360.00

Total Compensation $ 31,500.00

66) D
Period pay FICA Tax rate FICA Tax Employee and
Employer total FICA
$ 2,400.00 7.65% $ 183.60 $ 367.20
67) A
Annual amount Tax rate Tax due
subject to tax
Social Security Tax—employee $ 137,700.00 6.20% $ 8,537.40
share
Social Security Tax—employer $ 137,700.00 6.20% $ 8,537.40
share
Medicare—employee share $ 232,000.00 1.45% $ 3,364.00
Medicare—Additional employee $ 32,000.00 0.09% $ 28.80
share
Medicare—employer share $ 232,000.00 1.45% $ 3,364.00
Total $ 23,831.60

68) C
# of employees Wage base Tax rate Tax due
15 $ 7,000.00 0.6% $ 630.00

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Test Bank for Payroll Accounting 2021, 7th Edition, Jeanette Landin, Paulette Schirmer

69) A
Tax # of Wage base Tax rate Tax due
employees
FUTA 11 $ 7,000.00 0.60% $ 462.00
SUTA 11 $ 42,100.00 4.10% $ 18,987.10
Total $ 19,449.10

70) C
71) C
72) D
73) C
74) A
75) D
76) B
77) A
78) D
79) C
80) A
81) B

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