Concept explainers
1.
Payroll: The total payment that a company is required to pay to its employee for the services received is called as payroll.
Payroll withholding deduction: The amounts which the employer withheld from employees’ gross pay to deduct taxes such as federal income tax, state income tax, local income tax, and social security tax are called payroll withholding deduction.
Employer payroll taxes: The taxes which the employer must pay to the employees with their salaries are called employer payroll taxes. Such taxes are not withheld from employees’ gross earnings but instead they are paid by employer.
To calculate: The amount that would be reported for the year on each employee’s wage and tax statement.
1.
Answer to Problem 10.3BPR
Calculate the amount that would be reported for the year on each employee’s wage and tax statement.
Employee | Gross Earnings | Federal Income Tax Withheld | Social Security Tax Withheld | Medicare Tax Withheld |
Mr. A | $44,880(1) | $9,372(2) | $2,692.80(3) | $673.20(4) |
Mr. K | $25,200(5) | $3,731(6) | $1,512.00(7) | $378.00(8) |
Mr. Mc | $67,410(9) | $12,999(10) | $4,044.60(11) | $1,011.15(12) |
Mr. Mo | $55,200(13) | $9,396(14) | $3,312.00(15) | $828.00(16) |
Mr. S | $4,500(17) | $758(18) | $270.00(19) | $67.50(20) |
Mr. T | $4,875(21) | $669(22) | $292.50(23) | $73.13(24) |
Mr. W | $84,000(25) | $18,872(26) | $5,040.00(27) | $1,260.00(28) |
Explanation of Solution
Working notes:
Calculate gross earnings for Mr. A.
Calculate federal income tax withheld for Mr. A.
Calculate social security taxes withheld for Mr. A
Calculate Medicare taxes withheld for Mr. A.
Calculate gross earnings for Mr. K.
Calculate federal income tax withheld for Mr. K.
Calculate social security taxes withheld for Mr. K.
Calculate Medicare taxes withheld for Mr. K.
Calculate gross earnings for Mr. Mc.
Calculate federal income tax withheld for Mr. Mc.
Calculate social security taxes withheld for Mr. Mc.
Calculate Medicare taxes withheld for Mr. Mc.
Calculate gross earnings for Mr. Mo.
Calculate federal income tax withheld for Mr. Mo.
Calculate social security taxes withheld for Mr. Mo.
Calculate Medicare taxes withheld for Mr. Mo.
Calculate gross earnings for Mr. S.
Calculate federal income tax withheld for Mr. S.
Calculate social security taxes withheld for Mr. S.
Calculate Medicare taxes withheld for Mr. S.
Calculate gross earnings for Mr. T.
Calculate federal income tax withheld for Mr. T.
Calculate social security taxes withheld for Mr. T.
Calculate Medicare taxes withheld for Mr. T.
Calculate gross earnings for Mr. W.
Calculate federal income tax withheld for Mr. W.
Calculate social security taxes withheld for Mr. W.
Calculate Medicare taxes withheld for Mr. W.
2.
To calculate: The following employer payroll taxes for the year.
2.
Explanation of Solution
Calculate the following employer payroll taxes for the year.
(A)
Calculate social security tax.
(B)
Calculate Medicare tax.
(C)
Calculate State
(D)
Calculate Federal unemployment tax.
(E)
Calculate total payroll tax expense.
Want to see more full solutions like this?
Chapter 10 Solutions
Bundle: Financial & Managerial Accounting, Loose-Leaf Version, 14th + CengageNOWv2, 2 terms Printed Access Card
- Click the Chart sheet tab. On the screen is a chart of the four payroll taxes that a company might incur in total during the year. The four taxes are federal unemployment, state unemployment, Social Security, and Medicare. By the behaviors shown on the chart, identify below which of the four taxes each represents. Series 1 _____ Series 2 _____ Series 3 _____ Series 4 _____ When the assignment is complete, close the file without saving it again. TICKLERS (optional) Worksheet. A new employee was hired during November and was mistakenly omitted from the payroll register. The employees last name is Zuckerman, and his gross pay for November is 1,300. Add the new employee to the PR5 worksheet and include all standard withholding rates in computing net pay. Federal income tax withheld is 101. He is a union member. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as PRT. Chart. Using the PR4 file, prepare a 3-D pie chart to show the percentage of an employees gross pay that is withheld for taxes, Social Security, and so on, and how much is left over as net pay. Use Smith as your example. Complete the Chart Tickler Data Table and use it as a basis for preparing the chart. Enter your name somewhere on the chart. Save the file again as PR4. Print the chart.arrow_forwardCALCULATION AND JOURNAL ENTRY FOR EMPLOYER PAYROLL TAXES Portions of the payroll register for Kathy s Cupcakes for the week ended June 21 are shown below. The SUTA tax rate is 5.4%, and the FUTA tax rate is 0.6%, both on the first 7,000 of earnings. The Social Security tax rate is 6.2% on the first 118,500 of earnings. The Medicare rate is 1.45% on gross earnings. Calculate the employers payroll taxes expense and prepare the journal entry to record the employers payroll taxes expense for the week ended June 21 of the current year.arrow_forwardCALCULATION AND JOURNAL ENTRY FOR EMPLOYER PAYROLL TAXES Earnings for several employees for the week ended March 12, 20--, are as follows: Calculate the employers payroll taxes expense and prepare the journal entry as of March 12, 20--, assuming that FUTA tax is 0.6%, SUTA tax is 5.4%, Social Security tax is 6.2%, and Medicare tax is 1.45%.arrow_forward
- Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage LearningCentury 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:CengageCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage Learning
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubCollege Accounting, Chapters 1-27 (New in Account...AccountingISBN:9781305666160Author:James A. Heintz, Robert W. ParryPublisher:Cengage LearningFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,