ayroll Register and Payroll Journal Entry
1. Prepare a payroll register for Mary’s Luxury Travel for the week ended March 22, 20--. (In the Taxable Earnings/Unemployment Compensation column, enter the same amounts as in the Social Security column.) Total the amount columns. Round your answers to the nearest cent.
2. Assuming that the wages for the week ended March 22 were paid on March 24, prepare the journal entry for the payment of the payroll. When required, enter amounts in dollars and cents. If an amount box does not require an entry, leave it blank.
Mary Losch operates a travel agency called Mary’s Luxury Travel. She has five employees, all of whom are paid on a weekly basis. The travel agency uses a payroll register, individual employee earnings records, and a general journal.
Mary’s Luxury Travel uses a weekly federal income tax withholding table. Refer to Figure 8-4 in the text. The payroll data for each employee for the week ended March 22, 20—, are given below. Employees are paid 1½ times the regular rate for working over 40 hours a week.
Worked Mar. 16–22
Jan. 1–Mar. 15
Social Security tax is withheld from the first $118,500 of earnings at the rate of 6.2%. Medicare tax is withheld at the rate of 1.45%, and city earnings tax at the rate of 1%, both applied to gross pay. Bacon and Leung have $13 withheld and Cole and Hicks have $4 withheld for health insurance. Bacon and Leung have $20 withheld to be invested in the travel agency’s credit union. Cole has $38.5 withheld and Hicks has $19 withheld under a savings bond purchase plan.
Mary’s Luxury Travel’s payroll is met by drawing checks on its regular bank account. The checks were issued in sequence, beginning with Check No. 423.
Payroll: Payroll refers to the total amount that is required to be paid by the company to its employees during a week, month or other period. It is the financial record of the wages and bonus, net pay, salary and deductions of a company’s employees.
Payroll register: Payroll register is a form that is used by an employer to gather information on earnings, taxable earnings, deductions and net pay of each employee at the end of the each payroll period.
1. Prepare payroll register.
Note: Since no year is specified it is assumed the year to be 2018 and the tax rate and calculations are based on 2018.
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