Accounting

On October 10, 2010, Printfast Company sells a commercial printer for $2,350 with a one year warranty that covers parts. Warranty expense is project to be 4% of sales. On February 28, 2011, the printer requires repairs. The cost of the parts for the repair is $80 and Printfast pays their technician $150 to perform the repair. What is the warranty liability at the end of 2010?

$49.00

$84.80

$94.00

$0, there is no liability at the end of 2010

$230.00

 

12. Most employees and employers are required to pay:

Local payroll taxes

State payroll taxes

Federal payroll taxes

Both B and C only

Local, state and federal payroll taxes

 

13. Liabilities:

Must be certain

Must sometimes be estimated

Must be for a specific amount

Must always have a definite date for payment

Must involve an outflow of cash

 

14. An employee earned $4,300 working for an employer. The current rate for FICA social security is 6.2% and the FICA Medicare rate is 1.45%. The employer’s total FICA payroll tax for this employee is:

$62.35

$266.60

$328.95

$657.90

 

15. A special bank account used solely for the purpose of paying employees, is created by depositing the amount of each employees’ net pay into the account every pay period. This account is referred to as a(n):

Federal depository bank account

Employee’s Individual Earnings account

Employees’ bank account

Payroll register account

Payroll bank account

 

Solution:

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