Metro Media Company pays its employees monthly. Payments made by the company on October 31 follow. Cumulative amounts for the year paid to the persons prior to the October 31 payroll are also given. 1. Tori Parker, president, gross monthly salary of $20,000; gross earnings prior to October 31, $160,000. 2. Carolyn Catz, vice president, gross monthly salary of $14,000; gross earnings paid prior to October 31, $126,000. 3. Michelle Clark, independent accountant who audits the company's accounts and performs consulting services, $16,500; gross amounts paid prior to October 31, $42,500. 4. Will Wu, treasurer, gross monthly salary of $6,000; gross earnings prior to October 31, $54,000. 5. Payment to Review Services for monthly services of Tom Bradley, an editorial expert, $6,000; amount paid to Review Services prior to October 31, $30,000. Required: 1. Use an earnings ceiling of $132,900 for social security taxes and a tax rate of 6.2 percent and a tax rate of 1.45 percent on all earnings for Medicare taxes. Prepare a schedule showing the following information: a. Each employee's cumulative earnings prior to October 31. b. Each employee's gross earnings for October. c. The amounts to be withheld for each payroll tax from each employee's earnings; the employee's income tax withholdings are Parker, $5,600; Catz, $4,200; Wu, $1,320. d. The net amount due each employee. e. The total gross earnings, the total of each payroll tax deduction, and the total net amount payable to employees. 2. Prepare the general journal entry to record the company's payroll on October 31. 3. Prepare the general journal entry to record payments to employees on October 31.
Metro Media Company pays its employees monthly. Payments made by the company on October 31 follow. Cumulative amounts for the year paid to the persons prior to the October 31 payroll are also given. 1. Tori Parker, president, gross monthly salary of $20,000; gross earnings prior to October 31, $160,000. 2. Carolyn Catz, vice president, gross monthly salary of $14,000; gross earnings paid prior to October 31, $126,000. 3. Michelle Clark, independent accountant who audits the company's accounts and performs consulting services, $16,500; gross amounts paid prior to October 31, $42,500. 4. Will Wu, treasurer, gross monthly salary of $6,000; gross earnings prior to October 31, $54,000. 5. Payment to Review Services for monthly services of Tom Bradley, an editorial expert, $6,000; amount paid to Review Services prior to October 31, $30,000. Required: 1. Use an earnings ceiling of $132,900 for social security taxes and a tax rate of 6.2 percent and a tax rate of 1.45 percent on all earnings for Medicare taxes. Prepare a schedule showing the following information: a. Each employee's cumulative earnings prior to October 31. b. Each employee's gross earnings for October. c. The amounts to be withheld for each payroll tax from each employee's earnings; the employee's income tax withholdings are Parker, $5,600; Catz, $4,200; Wu, $1,320. d. The net amount due each employee. e. The total gross earnings, the total of each payroll tax deduction, and the total net amount payable to employees. 2. Prepare the general journal entry to record the company's payroll on October 31. 3. Prepare the general journal entry to record payments to employees on October 31.
Chapter3: Social Security Taxes
Section: Chapter Questions
Problem 17PB
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781305084087
Author:
Cathy J. Scott
Publisher:
Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781305084087
Author:
Cathy J. Scott
Publisher:
Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:
9781337679503
Author:
Gilbertson
Publisher:
Cengage