Test: CPA Financial Accounting and Reporting (FAR)

1.

Under state law, Warner Company pays 2% of eligible gross wages for unemployment insurance. Eligible gross wages are defined as the first $12,000 of wages earned by each employee during a year. Warner had 5 employees, each of whom earned $40,000 during Year 2. What will Warner record as unemployment insurance expense for the year?

$800

$1,200

240

$4,000

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