Horngren's Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (12th Edition)

12th Edition

ISBN: 9780134642932

Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura

Publisher: PEARSON

See similar textbooks

Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies wh…

Videos

Textbook Question

Chapter 11, Problem 11.1EI

Ethical Issue 11-1

Many small businesses have to squeeze down costs any way they can just to survive. One way many businesses do this is by hiring workers as ‘independent contractors’ rather than as regular employees. Unlike rules for regular employees, a business does not have to pay Social Security (FICA) taxes and unemployment insurance payments for independent contractors. Similarly, it does not have to withhold federal, state, or local income taxes or the employee’s share of FICA taxes. The IRS has a “20 factor test” that determines whether a worker should be considered an employee or a contractor, but many businesses ignore those rules or interpret them loosely in their favor. When workers are treated as independent contractors, they do not get a W-2 form at tax time (they get a 1099 instead); they do not have any income tax withheld; and they find themselves subject to “self-employment” taxes, by which they bear the brunt of both the employee’s and the employer’s shares of FICA taxes.

Requirements

When a business abuses this issue, how is the independent contractor hurt?
If a business takes an aggressive position—that is, interprets the law in a very slanted way—is there an ethical issue involved? Who is hurt?

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 11, Problem 11.2DC

Chapter 11, Problem 11.1FSC

Students have asked these similar questions

INVOLVE was incorporated as a not-for-profit organization on January 1, 2023. During the fiscal year ended December 31, 2023, the following transactions occurred. 1. A business donated rent-free office space to the organization that would normally rent for $35,600 a year. 2. A fund drive raised $188,000 in cash and $106,000 in pledges that will be paid next year. A state government grant of $156,000 was received for program operating costs related to public health education. 3. Salaries and fringe benefits paid during the year amounted to $209,160. At year-end, an additional $16,600 of salaries and fringe benefits were accrued. 4. A donor pledged $106,000 for construction of a new building, payable over five fiscal years, commencing in 2025. The discounted value of the pledge is expected to be $94,860. 5. Office equipment was purchased for $12,600. The useful life of the equipment is estimated to be five years. Office furniture with a fair value of $10,200 was donated by a local office…

Fairfield Company's payroll costs for the most recent month are summarized here: Item Hourly labor unges Description 920 hours $27 per hour 190 hours for Job 101 340 hours for Job 102 Factory supervision Production engineer Factory Janitorial work Selling, general, and administrative salaries Total payroll costs Required: 390 hours for Job 103 Total Cost $ 5,130 9,180 10,530 $ 24,840 4,350 7,100 1,200 8,800 $ 46,298 1. & 2. Prepare the journal entries for payroll and to apply manufacturing overhead to production. The company applies manufacturing overhead to products at a predetermined rate of $54 per direct labor hour Note: If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. View transaction list Journal entry worksheet A B Record Fairfield Company's payroll costs to be paid at a later date. Note Enter debits before credits. S.No Date 1 Account Title Debit Credit

No wrong answer

Chapter 11 Solutions

Horngren's Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (12th Edition)

Ch. 11 - On January 1, 2018, a business borrowed $18,000 on...Ch. 11 - Prob. 2QC Ch. 11 - Prob. 3QC Ch. 11 - Prob. 4QC Ch. 11 - Prob. 5QC Ch. 11 - Prob. 6QC Ch. 11 - Prob. 7QC Ch. 11 - Prob. 8QC Ch. 11 - Prob. 9QC Ch. 11 - McDaniel and Associates reported the following...

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.