Reference no: EM132610220

Questions -

Question 1 - ABC pays its employees monthly. The payroll information shown below is for December 2019, the last month of the ABC fiscal year

1. Total gross wages: $400,000

2. Income tax withholding: $80,000

3. Federal Unemployment Tax Rate (FUTA) 0.6%, $ 50,000 of total payroll exceeds the limit of $7,500

4. State Unemployment Tax Rate (SUTA) 5.4%, $ 50,000 of total payroll exceeds the limit of $7,500

Social Security Tax Rate: 6.2%, $ 2,000 of total payroll exceeds $ 128,400 limit.

Medicare tax rate: 1.45% no limit

Request -

1. Prepare the journal entry to record the payment of wages to employees with their corresponding deductions for the month of December 2019.

Question 2 - Prepare the journal entry to record the employer's payroll taxes for the month of December 2019.

The following facts apply to ABC's pending litigation as of December 31, 2019:

ABC is defending itself against a lawsuit and believes there is a 51% chance that it will lose in court. If they lose, ABC estimates the damages will be $ 150,000

Request -

1. Indicate how ABC should report this lawsuit in 10K 2019 under U.S. GAAP.

2. Indicate how ABC should report this claim in 10K 2019 under IFRS.