Answered: 4. Richard Lewis Inc pays its employees…

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter13: Accounting For Payroll And Payroll Taxes

Section: Chapter Questions

Problem 2AP

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4. Richard Lewis Inc pays its employees monthly. The payroll information listed below is for January 2021, the first month of Lewis’ fiscal year. Assume none of the employees' earnings reached $7,000 during the month. Salaries $80,000 Federal income taxes to be withheld 16,000 Federal unemployment tax rate (FUTA) 0.80% State unemployment tax rate (after FUTA deduction) 5.40% Social security tax rate 6.2% Medicare tax rate 1.45% The journal entry to record payroll for the January 2022 pay period will include a debit to payroll tax expense of: A. $6,120. B. $4,960. C. $11,080. D. $57,880. -1- 5. Under IFRS, a company can demonstrate their ability to refinance long-term debt for purposes of excluding the debt from current liabilities by: A. Completing refinancing before the date of issuance of the financial statements. B. Completing refinancing before the balance sheet date. C. Promising to refinance the liabilities. D. None of the above.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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