Berkley's Gross Pay for the Week Is $780

question 146

Multiple Choice

Berkley's gross pay for the week is $780. Berkley's yearly pay is under the limit for OASDI. Assume that the rate for state and federal unemployment compensation taxes is 6.2%, and that Berkley's pay year-to-date has not yet exceeded the $7,000 cap. How much is the amount of state and federal unemployment tax that his employer must record as payroll tax expense and pay to the federal and state governments?

• A)$110.10
• B)$108.03
• C)$59.67
• D)$48.36

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Definitions:

Adjusted Trial Balance

A list of all accounts and their balances after adjusting entries have been made, used to prepare financial statements.

Prepaid Insurance

An asset account that represents insurance premiums paid in advance, which are expensed over the period the insurance coverage relates to.

Current Asset

Asset expected to be converted into cash, sold, or consumed within a year or within the business's operating cycle.

Liability Subsections

The divisions within the liabilities section of a balance sheet, categorizing liabilities based on their nature or duration, such as current liabilities and long-term liabilities.