An employee receives an hourly rate of $25 with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: worked, 42; federal income tax withheld, $350; cumulative earnings for year prior to current week, $59, 700; FICA tax rate, 7.5% on maximum of $60,000, and 1.5% on earnings over $60,000. What is the gross pay for the employee?$725.00$702.50$1,075.00$1,052.50The balance in the prepaid rent account before adjustment at the end of the year is $12,000, which represents three months’ rent paid on December 1. The adjusting entry required on December 31 is:Debit Rent Expense, $4,000; credit Prepaid Rent, $4,000Debit Prepaid Rent, $8,000; credit Rent Expense, $8,000Debit Rent Expense, $8,000; credit Prepaid Rent, $8,000Debit Prepaid Rent, $4,000; credit Rent Expense $4,000With an increase in profits in a particular industry, we would expect:Firms to leave the industryFirms to produce lessFirms to enter the industryPeople to buy lessTRUE/FALSEEquipment is an example of a liability.TrueFalseRevenue accounts are increased by credits.TrueFalseAsset accounts are increased by credits.Truefalse

Assets has debit balance and liabilities has credit balance. To increase Assets one should debit the…

Answered: The balance in the prepaid rent account…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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An employee receives an hourly rate of $25 with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: worked, 42; federal income tax withheld, $350; cumulative earnings for year prior to current week, $59, 700; FICA tax rate, 7.5% on maximum of $60,000, and 1.5% on earnings over $60,000. What is the gross pay for the employee?
1. $725.00
2. $702.50
3. $1,075.00
4. $1,052.50
The balance in the prepaid rent account before adjustment at the end of the year is $12,000, which represents three months’ rent paid on December 1. The adjusting entry required on December 31 is:
1. Debit Rent Expense, $4,000; credit Prepaid Rent, $4,000
2. Debit Prepaid Rent, $8,000; credit Rent Expense, $8,000
3. Debit Rent Expense, $8,000; credit Prepaid Rent, $8,000
4. Debit Prepaid Rent, $4,000; credit Rent Expense $4,000
With an increase in profits in a particular industry, we would expect:
1. Firms to leave the industry
2. Firms to produce less
3. Firms to enter the industry
4. People to buy less

TRUE/FALSE

Equipment is an example of a liability.
1. True
2. False
Revenue accounts are increased by credits.
1. True
2. False
Asset accounts are increased by credits.
1. True
2. false

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