Ningbo Shipping Has Projected Sales in May, June, and July

question 29

Multiple Choice

Ningbo shipping has projected sales in May, June, and July of $500, $600, and $700, respectively. It makes 20 percent of sales for cash and collects the balance one month following the sale. Ningbo Shipping's total cash receipts in July are

• A) $620
• B) $520
• C) $680
• D) $1,100

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Definitions:

Net Pay

The amount of money received by an employee after all deductions have been made from the gross salary.

FICA Tax

Federal Insurance Contributions Act tax, which funds Social Security and Medicare, required to be paid by both employees and employers.

Federal Income Tax

A charge imposed by the United States federal government on the yearly income of individuals, corporations, trusts, and other legal bodies.

Withholding Allowance

Withholding allowance is an exemption that reduces how much income tax an employer deducts from an employee's paycheck, based on the number of allowances claimed.