The following data comes from the payroll department of LoJack ...

[Haya94]

The following data comes from the payroll department of LoJack Corporation for the last pay period of 2011. Employees will not be paid until 2012.
 
  Gross employee earnings 330,000
  Federal income taxes withheld 48,000
  FICA Social Security taxes withheld 20,460
  Medicare taxes withheld 4,785
 
  Required:
  1. Determine the amount the balance sheet will report as Wages payable.
  2. Determine the amount the income statement will report as Wages expense from this pay period.
  3. What type of liability is Wages payable?
  4. To what party must the company pay the FICA taxes?
  5. Why does LoJack have to withhold taxes from its employees?
  What will be an ideal response?

Question 2

A clerk receives checks and customer receipts in the mail. He endorses the checks, fills out the deposit slip, and posts the checks to the cash receipts events data. The clerk is exercising which functions?
 a. recording and executing events
  b. authorizing and executing events
  c. recording and authorizing events
  d. safeguarding of resources and authorizing events

[flannelavenger]

Answer to Question 1

1. 256,755 = 330,000  48,000  20,460  4,785
2. 330,000
3. definitely determinable current liability
4. to the federal government (US Treasury), usually by deposit in a local bank
5. Federal law requires that employers withhold taxes from employees.

Answer to Question 2

A