Question

1. Which of the following is true of good internal controls over payroll?

A.

Disbursement of paychecks should not be separate from the function of maintaining payroll records.

B.

Accounting for payroll should be separate from hiring and firing of employees.

C.

Hiring and firing employees should not be separated from accounting and from disbursing paychecks.

D.

Cash receipts from customers should be separated from the accounting for accounts receivable.

2. Sean's gross pay for this month is $8,750. His gross year−to−datem pay, prior to this month, totaled $113,000.

Sean's rate for federal income tax is 24 %. His voluntary deductions total $1,000. What is Sean's net pay? (Assume an OASDI rate of 6.2 %, applicable on the first $118,500 earnings, and a Medicare rate of 1.45 %, applicable on all earnings. Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

a. 6182

b. 6650

c. 5650

d. 5182

3. Hank earns $16.50 per hour with time−and−a−half for hours in excess of 40per week. He worked 50 hours at his job during the first week of March 2018. Hank pays income taxes at 15 % and 7.65 % for OASDI and Medicare. All of his income is taxable under FICA. Determine Hank's net pay for the week. (Do not round any intermediate calculations, and round your final answer to the nearest cent.)

a. 549.86

b. 701.95

c. 771.38

d. 574.61

Answer 1

1
Accounting for payroll should be separate from hiring and firing of employees.
Option B is correct
2
Gross Pay		8750
Less: Withholdings
OASDI tax	341		=(118500-113000)*6.2%
HI tax	127		=8750*1.45%
Federal income tax	2100		=8750*24%
Voluntary deductions	1000
		3568
Sean's net pay		5182
Option D is correct
3
Gross Pay		907.5	=(40*16.5)+(10*16.5*1.5)
Less: Withholdings
OASDI and Medicare tax	69.42		=907.5*7.65%
Federal income tax	136.13		=907.5*15%
		205.55
Hank's net pay		701.95
Option B is correct