If the limit for Social Security is 113,700 and Medicare is applied to all earnings and George Rory's gross earnings this pay period are 7,300, with cumulative earnings prior to this pay period of 112,460, the taxable earnings for FICA taxes are
a. Social Security, 0; Medicare, 1,240.
b. Social Security, 1,240; Medicare, 0.
c. Social Security, 1,240; Medicare, 6,060.
d. Social Security, 1,240; Medicare, 7,300.
e. Social Security, 0; Medicare, 0.
Question 2
How is the statement of cash flows connected to the balance sheet?
a. The statement of cash flows shows changes in the asset and liability accounts to explain cash from operating activities.
b. The changes in all revenue and expense accounts are calculated and then listed as cash inflows or outflows.
c. The changes in all of the balance sheet accounts are calculated and then listed as inflows or outflows, except for cash.
d. Changes in asset accounts are recorded as operating activities, changes in liability accounts are recorded as financing activities and changes in equity accounts are recorded as investing activities.
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