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Problem 10.2B
? Computing earnings, determining deductions and net amount due, preparing payroll register, journalizing payroll transactions.
Objectives 10-2, 10-3, 10-4, 10-5
The four employees for ACWorks are paid on an hourly basis. During the week of December 25-31, 2019, these employees worked the hours indicated. Information about their hourly rates, marital status, withholding allowances, and cumulative earnings prior to the current pay period also appears below.
Employee: Betty Brooks Hours worked: 45 Regular Hourly Rate: $12.80 Marital Status: M Withholding Allowances: 3 Cumulative Earnings: $ 44,179.00.
Employee: Cynthia Carter Hours worked: 48 Regular Hourly Rate: $13.40 Marital Status: M Withholding Allowances: 2 Cumulative Earnings: $53,015.00.
Employee:Mary Easley Hours worked: 44 Regular Hourly Rate: $29.30 Marital Status: M WIthholding Allowances: 4 Cumulative Earnings: $82,748.00
Employee: James Periot Hours worked: 30 Regular Hourly Rate: 37.00 Marital Status: S WIthholding Allowances: 2 Cumulative Earnings: $104,486.00
INSTRUCTIONS
Enter the basic payroll information for each employee in a payroll register. Record the employee's name, number of withholding allowances, marital status, total hours, overtime hours, and regular hourly rate. Consider any hours worked beyond 40 in the week as overtime hours.
Compute the regular earnings, overtime premium, and gross earnings for each employee. Enter the figures in the payroll register.
Compute the amount of social security tax to be withheld from each employee's gross earnings. Assume a 6.2 percent social security tax rate on the first $122,700 earned by each employee during the year. Enter the figures in the payroll register.
Compute the amount of Medicare tax to be withheld from each employee's gross earnings. Assume a 1.45 percent Medicare tax rate on all earnings for each employee during the year. Enter the figure on the payroll register.
Determine the amount of federal income tax to be withheld from each employee's gross earnings. Income tax withholdings are $235 for Easley and $238 for Periot. Enter these figures in the payroll register.
Compute the net amount due each employee and enter the figures in the payroll register.
Complete the payroll register for the store employees.
Page 375
General journal entry to record the payroll for the week ended December 31, 2019. Use page 18 for the journal.
Record the general journal entry to summarize the payment on December 31, 2019, of the net amount due employees.
Analyze: What is the difference between the amount credited to theCash account on December 31, 2019, for the payroll week ended December 31 and the amount debited toWages Expense for the same payroll period? What causes the difference between the two figures?
Problem 10.4B
? Computing gross earnings, determining deductions and net amount due, journalizing payroll transactions.
Objectives 10-2, 10-3, 10-4, 10-5, 10-7
Universal Operations pays its employees monthly. Payments made by the company on November 30, 2019, follow. Cumulative amounts paid to the persons named prior to November 30 are also given.
Page 376
Tony Orlando, president, gross monthly salary of $17,000; gross earnings prior to November 30, $170,000.
Chris Stamos, vice president, gross monthly salary of $12,000; gross earnings paid prior to November 30, $120,000.
Caley Marie, independent media buyer who purchases media contracts for companies and performs other public relations consulting services, $15,650; gross amounts paid prior to November 30, $52,850.
Claire Hayakawa, treasurer, gross monthly salary of $6,400; gross earnings prior to November 30, $57,600.
Payment to the Canal Marketing Group for monthly services of Anna Canal, a marketing and public relations expert, $15,500; amount paid to the Canal Marketing Group prior to November 30, $46,500.
INSTRUCTIONS
Use an earnings ceiling of $122,700 and a tax rate of 6.2 percent for social security taxes and a tax rate of 1.45 percent on all earnings for Medicare taxes. Schedule showing the following information:
Each employee's cumulative earnings prior to November 30.
Each employee's gross earnings for November.
The amounts to be withheld for each payroll tax from each employee's earnings; the employee's income tax withholdings are Tony Orlando, $4,760; Chris Stamos, $3,000; Claire Hayakawa, $1,200.
The net amount due each employee.
The total gross earnings, the total of each payroll tax deduction, and the total net amount payable to employees.
Give the general journal entry to record the company's payroll on November 30. Use journal page 24. Omit explanations.
Give the general journal entry to record payments to employees on November 30.
Analyze: In what month in 2019 did Chris Stamos reach the withholding limit for social security?
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