What is the maximum FICA tax for 2010?
The maximum FICA tax for the year 2010 remains the same as the 2009 FICA tax: 7.65% on each employee’s first $106,800 of taxable earnings (such as wages, salaries, bonuses, etc.) plus 1.45% of any employee’s taxable earnings in excess of $106,800.
The FICA tax is withheld from each employee’s [...] Continue Reading…
2 CommentsWhat are the elements of financial statements?
The elements of financial statements are the classes of items contained in the financial statements. Examples of elements include assets, liabilities, equity or net assets, revenues, expenses, gains, and losses.
You can learn more about the elements by reading the FASB’s Statement of Financial Accounting Concepts No. 6, Elements of [...] Continue Reading…
6 CommentsWhat is accounting for price level changes?
In 1979 the Financial Accounting Standards Board (FASB) issued its Statement of Financial Accounting Standards No. 33 entitled Financial Reporting and Changing Prices. (You will find the original Statement No. 33 on www.FASB.org.) In short, Statement No. 33 required large companies to report supplementary information on the effects of [...] Continue Reading…
4 CommentsWhy does a bond’s price decrease when interest rates increase?
Bond prices decrease when interest rates increase because the fixed interest and principal payments stated in the bond will become less attractive to investors.
Let’s illustrate this with a $100,000 bond having a stated interest rate of 9% and having a remaining life of 5 years. This bond will pay [...] Continue Reading…
3 CommentsWhat is the difference between gains and proceeds in terms of long-term assets?
When long-term assets are sold, the amounts received are referred to as the proceeds.
If the amount of the proceeds is greater than the book value or carrying value of the long-term asset at the time of the sale, the difference is a gain on the sale or disposal. If [...] Continue Reading…
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