Question : 81.Refer to the information above. Employees’ annual “take-home-pay,” totals approximately: A.$672,300. B.$762,300 : 1237426

 

 

81.Refer to the information above. Employees’ annual “take-home-pay,” totals approximately:   

A.$672,300.

 

B.$762,300.

 

C.$675,000.

 

D.$741,150.

$900,000 – ($900,000 × .0765) – ($900,000 × .10) = $741,150

 

 

 

82.Refer to the information above. Some of the payroll-related expenses incurred by Stone Corporation are mandated by law, rather than negotiated with employees. During the current year, these mandated amounts increased Stone’s payroll-related expenses by approximately:   

A.$68,850.

 

B.$200,700.

 

C.$131,850.

 

D.$176,850.

($900,000 × .05) + ($900,000 × .0765) + ($900,000 × .02) = $131,850

 

 

 

83.Refer to the information above. Assume that the federal government implements a 10% payroll tax upon employers to finance health insurance for all citizens and residents. Stone will pay this tax instead of purchasing group health insurance. This will cause Stone’s total annual payroll-related expenses to:   

A.Decrease by $15,000.

 

B.Increase by $15,000.

 

C.Decrease by $32,500.

 

D.No change, because payroll taxes are withheld from employees’ pay.

($900,000 × .10) – ($350 × 12 × 25) = $(15,000)

 

 

 

Rockland Corporation has 22 employees and incurs total wages and salaries expense of $800,000 per year. The following table shows various payroll amounts as a percentage of this annual wage and salaries expense:  In addition, Rockland provides group health insurance for its entire workforce. The cost of this insurance is $450 per month for each employee.

 

84.Refer to the information above. The company’s annual payroll-related expenses amount to approximately:   

A.$1,137,200.

 

B.$1,076,000.

 

C.$980,000.

 

D.$800,000.

$800,000 + (.05 × $800,000) + (.0765 × $800,000) + (.05 × $800,000) + (.02 × $800,000) + ($450 × 12 × 22) = $1,076,000

 

 

 

85.Refer to the information above. Employees’ annual “take-home-pay,” totals approximately:   

A.$642.800.

 

B.$760,000.

 

C.$681,200.

 

D.$658,800.

$800,000 – ($800,000 × .0765) – ($800,000 × .10) = $658,800

 

 

 

86.Refer to the information above. Some of the payroll-related expenses incurred by Rockland Corporation are mandated by law, rather than negotiated with employees. During the current year, these mandated amounts increased Rockland’s payroll-related expenses by approximately:   

A.$101,200.

 

B.$96,000.

 

C.$117,200.

 

D.$118,800.

($800,000 × .05) + ($800,000 × .0765) + ($800,000 × .02) = $117,200

 

 

 

87.In preparing an amortization table, it is necessary to include:   

A.The original amount of the liability, the amount of periodic payments, and the interest rate.

 

B.The original amount of the liability, the amount of periodic payments, and the amount of past payments.

 

C.The monthly payment, the total amount of past payments, and the original amount of the liability.

 

D.The total amount of past payments, the interest rate, and the amount of periodic payments.

 

 

 

 

88.Temple Corporation purchased a piece of real estate, paying $400,000 cash and financing $700,000 of the purchase price with a 10-year, 15% installment note. The note calls for equal monthly payments that will result in the debt being completely repaid by the end of the tenth year. In this situation:   

A.The aggregate amount of the monthly payments is $700,000.

 

B.Each monthly payment is greater than the amount of interest accruing each month.

 

C.The portion of each payment representing interest expense will increase over the 10-year period, since principal is being paid off, yet the payment amount does not decrease.

 

D.The portion of each monthly payment representing repayment of principal remains the same throughout the 10-year period.

 

 

 

 

89.When an installment note is structured as a “fully amortizing” loan with equal monthly payments (such as a traditional mortgage):   

A.The portion of each payment allocated to interest expense is the same each month.

 

B.The sum of the monthly payments is equal to the amount of the installment note (mortgage).

 

C.The difference between the sum of all monthly payments and the principal amount of the note constitutes interest.

 

D.The portion of each payment allocated to repayment of principal decreases each month as the mortgage is paid off.

 

 

 

 

On December 1, Year 1, Bradley Corporation incurs a 15-year $200,000 mortgage liability in conjunction with the acquisition of an office building. This mortgage is payable in monthly installments of $2,400, which include interest computed at the rate of 12% per year. The first monthly payment is made on December 31, Year 1.

 

90.Refer to the information above. Compute the total amount to be paid by Bradley over the 15-year life of the mortgage.   

A.$200,000.

 

B.$562,000.

 

C.$432,000.

 

D.$474,000.

$2,400 × 12 × 15 = $432,000