1/ On November 1, Alan Company signed a 120-day, 12% note payable, with a face v

Question

1/ On November 1, Alan Company signed a 120-day, 12% note payable, with a face value of $15,300. What is the maturity value of the note on March 1? (Use 360 days a year.)

Multiple Choice

$15,300

$15,708

$15,606

$15,504

$15,912

2/

The chief executive officer earns $21,500 per month. As of May 31, her gross pay was $107,500. 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- Social Security withheld from this employee for the month of June?

Multiple Choice

$7,347.00

$682.00

$1,333.00

$159.50

$311.75

3/

During the first week of January, an employee works 43 hours. For this company, workers earn 150% of their regular rate for hours in excess of 40 per week. Her pay rate is $35 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 $99 in federal income taxes withheld. What is the amount of this employee’s net pay for the first week of January?

Multiple Choice

$1,557.50

$218.15

$1,438.35

$1,339.35

$1,775.65

Explanation / Answer

1 Maturity value of the note on March 1 = 15300+(15300*12%/360*120)= 15912 2 FICA- Social Security withheld =(118500-107500)*6.2%= 682 3 Gross pay 1557.5 =(40*35)+(3*1.5*35) Deduction: Social Security 96.57 =1557.5*6.2% FICA Medicare 22.58 =1557.5*1.45% Federal income taxes 99 Net pay 1339.35

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