Acct 211 chapter 10 2025| complete exam set (questions and verified
answers)frequently most tested questions | already passed!
current liabilities - -liabilities that come due within the coming year or normal operating
cycle
--three types of current liabilities - -accounts payable
accrued liabilities
notes payable and interest
--payroll deductions - -payroll deductions are either required by law or voluntarily requested
by employees and create a current liability for the company
--examples of payroll deductions - -income tax (state and federal)
FICA tax
other deductions (charitable donations, union dues, etc.)
health insurance premiums
--net pay equation - -net pay = gross pay - amounts withheld
--Adam Palmer earned gross pay of $600 in the current payroll period. General Mills
withheld $58 in federal income taxes, $48.80 for FICA, and $10 for United Way, resulting in
net pay of $483.20
JOURNAL ENTRY - -Wages and salaries expense 600
Withheld income taxes payable 58
FICA payable 48.80
United Way payable 10
Cash 483.20
--employers have other liabilities related to payroll - -FICA
federal unemployment tax
state unemployment tax
--assume General Mills was required to contribute $16,400 for FICA, $250 for federal
unemployment tax, and $1350 for state unemployment tax
JOURNAL ENTRY - -Payroll tax expense 18,000
FICA tax payable 16,400
federal unemployment payable 250
state unemployment payable 1350
--accrued income taxes - -corporation calculate taxable income by subtracting tax-allowed
expenses from revenues. this taxable income is then multiplied by a tax rate, which for most
large corporations is about 35%
--General Mills calculated taxable income to be $1,000,000 and is subject to a 35% tax rate,
so income taxes owed are - -350,000 = (1,000,000 x 0.35)
--journal entry - -Income tax expense 350,000
answers)frequently most tested questions | already passed!
current liabilities - -liabilities that come due within the coming year or normal operating
cycle
--three types of current liabilities - -accounts payable
accrued liabilities
notes payable and interest
--payroll deductions - -payroll deductions are either required by law or voluntarily requested
by employees and create a current liability for the company
--examples of payroll deductions - -income tax (state and federal)
FICA tax
other deductions (charitable donations, union dues, etc.)
health insurance premiums
--net pay equation - -net pay = gross pay - amounts withheld
--Adam Palmer earned gross pay of $600 in the current payroll period. General Mills
withheld $58 in federal income taxes, $48.80 for FICA, and $10 for United Way, resulting in
net pay of $483.20
JOURNAL ENTRY - -Wages and salaries expense 600
Withheld income taxes payable 58
FICA payable 48.80
United Way payable 10
Cash 483.20
--employers have other liabilities related to payroll - -FICA
federal unemployment tax
state unemployment tax
--assume General Mills was required to contribute $16,400 for FICA, $250 for federal
unemployment tax, and $1350 for state unemployment tax
JOURNAL ENTRY - -Payroll tax expense 18,000
FICA tax payable 16,400
federal unemployment payable 250
state unemployment payable 1350
--accrued income taxes - -corporation calculate taxable income by subtracting tax-allowed
expenses from revenues. this taxable income is then multiplied by a tax rate, which for most
large corporations is about 35%
--General Mills calculated taxable income to be $1,000,000 and is subject to a 35% tax rate,
so income taxes owed are - -350,000 = (1,000,000 x 0.35)
--journal entry - -Income tax expense 350,000
