Excel Products Inc

question 43

Essay

Excel Products Inc.pays its employees semimonthly.The summary of the payroll for December 31,2012 indicated the following:

For the year ended 2012,$40,000 of the December 31 payroll is subject to social security tax of 6%;$120,000 is subject to Medicare tax of 1.5%;$10,000 is subject to state unemployment tax of 4.3% and federal unemployment tax of 0.8%.As of January 1,2013 all of the $120,000 is subject to all payroll taxes.Present the journal entries for payroll tax expense if the employees are paid (a)December 31 of the current year, (b)January 2 of the following year.

Understand the concept of random variables and how they relate to risk and uncertainty in economic decisions.

Understand and describe the concepts of adverse selection and moral hazard in insurance markets.

Explain the impact of private information on economic efficiency and the role of risk in economic decision-making.

Apply the concept of expected value to calculate health costs and insurance premiums.

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Definitions:

Self-Censorship

The act of censoring or withholding one's opinions, feelings, or concerns, especially in a group setting, due to anticipated negative response or judgement from others.

Atmosphere of Unanimity

A situation in decision-making groups where a consensus is assumed or imposed, and dissenting views are minimized or ignored, potentially leading to poor decisions.

Desire for Success

The motivation to achieve goals and attain a high level of performance or accomplishment.

Symptom of Groupthink

A sign or manifestation of groupthink, which is the practice of thinking or making decisions as a group in a way that discourages creativity or individual responsibility.