38. An employee receives an hourly rate of $25, with time and à hall for all hou

Question

38. An employee receives an hourly rate of $25, with time and à hall for all hours wurRed ll CxcL3S OT 0 u a week. Payroll data for the current week are as follows: hours worked, 46 federal income tax withheld $350, cumulative earnings for year prior to current week, $99,700; social security tax rate, 6.0% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings. What is the net amount to be paid the employee? a. $857.00 b. $1,133.14 c. $838.62 d. $875.00 39. A ten-year bond was issued at par for $250,000 cash. This transaction should be shown on a statement of cash flows under a. financing activities b. investing activities c. operating activities d. noncash investing and financing activities The classification and normal balance of the accounts payable account is a. an expense with a debit balance b. an asset with a credit balance c. a liability with a credit balance d. an asset with a debit balance 40. 41. The adjusting entry for rent earned that is currently recorded in the unearned rent account is a. b. c. d. debit Unearned Rent, credit Prepaid Rent debit Rent Expense; credit Unearned Rent debit Rent Revenue; credit Unearned Rent debit Unearned Rent; credit Rent Revenue 42. on July 8 Alton C issued an $80,000 6% 120-day note pa yable to Seller Co. Assume that the fiscal year of Alton Co, ends July 31. Using the 360-day year in your calculations, what is the amount of int expense recognized by Alton in the current fiscal year? a. $106.67 b. $400.00 c. $306.67 d. $1,200.00

Explanation / Answer

Q38. Amsewer is c $ 838.62 Explanation: Gross pay (40*25+6*37.50) 1225 Less: Deductions: Security tax (300*6%) 18 Medicare tax (1225*1.5%) 18.375 Income tax withheld 350 Net pay 838.625 Q39. Answer is a. Financing activities Q40. Answer is c. a liability with a credit balance Q41. Answer is d. Debit unearned rent credit rent revenue Q42. Answer is c. $ 306.67 Explanation: Note amount 80000 Period of notes till July31 23 Ratte of interest 6% Interest amount: 80000*6%*23/120 = 306.67

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