Author Question: Rounding differences with the employee and employer amounts of FICA taxes are handled on the 941 ... (Read 31 times)

luvbio · **on:** Jul 6, 2018

Rounding differences with the employee and employer amounts of FICA taxes are handled on the 941 report by:
a. Any differences are paid in or refunded as appropriate
b. Line 7 accommodates fraction differences, which accommodates rounding
c. When differences occur, the numbers are adjusted before the report to balance
d. None of the above

Question 2

What is important to understand about the label pro forma?

a. Pro forma refers to GAAP-based financial statements.
b. Pro forma requires firms to present two distinct net profit amounts in their Form 10-Ks.
c. Pro forma relates to the amount of debt in a firm's capital structure.
d. Pro forma earnings or financial statements are sometimes based on a firm's own definition which is not technically a correct definition.

Use the following selected financial information for Wilcox Corporation to answer questions 11-20.
Wilcox Corporation
Income Statement
For the Year Ended December 31, 2015

Net sales 2,870
Cost of goods sold 1,985
Gross profit 885
Operating expenses 620
Operating profit 265
Interest expense 40
Earnings before taxes 225
Income tax expense 80
Net profit 145

Wilcox Corporation
Balance Sheet
December 31, 2015

Assets Liabilities and stockholders' equity
Current assets Current liabilities
Cash 25 Accounts payable 85
Short-term investments 15 Accrued liabilities 45
Accounts receivable 70 Total current liabilities 130
Inventory 150 Long-term debt 240
Total current assets 260 Total liabilities 370
Long-term assets Stockholders' equity
Net PPE 390 Common stock and PIC 80
Goodwill 210 Retained earnings 410
Total stockholders' equity 490
Total assets 860 Total liabilities and equity 860

WilcoxCorporation
Statement of Cash Flow Information
For the Year Ended December 31, 2015

Cash from operating activities 150

Investing activities:
Capital expenditures 60
Acquisitions 10

Financing activities:
Proceeds from long-term borrowing 50
Payments on long-term borrowing 25
Payments of cash dividends 20

Cash paid for interest 10
Cash paid for income taxes 75