Sally Is an Electrician Employed by Bogie Company

question 94

Multiple Choice

Sally is an electrician employed by Bogie Company. Sam is a self-employed electrician. During the current year, Sally's salary is $85,000 and Sam's net self-employment income is $85,000. Which of the following statements about the Social Security and self-employment taxes paid is/are correct?
I.Sam's self-employment tax is greater than the Social Security tax paid on Sally's income.
II.Sam and Sally pay the same amount of tax.
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• A)Only statement I is correct.
• B)Only statement II is correct
• C)Both statements are correct
• D)Neither statement is correct

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Definitions:

Finished Goods Warehouse

A storage area for products that have completed the manufacturing process and are ready to be sold or distributed.

Weighted-Average Method

A cost accounting method that calculates the cost of units produced by averaging the costs of different batches of the units.

Ending Work in Process Inventory

indicates the value of products that are partially completed at the end of an accounting period.

Cost Reconciliation Report

A report that bridges the gap between the opening and closing balances of a job or project, detailing all the costs incurred.