FUNDAMENTAL ACCOUNTING PRINCIPLES
FUNDAMENTAL ACCOUNTING PRINCIPLES
24th Edition
ISBN: 9781264044375
Author: Wild
Publisher: McGraw-Hil
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Chapter 11, Problem 3BPSB
To determine

Concept Introduction:

Employee FICA Taxes:

Employee FICA taxes are withheld from salaries by employers to cover Social Security Taxes which is used to cover post retirement or disability expenses and Medicare taxes used to cover medical expenses.

Employer Payroll Taxes An employer needs to pay Employer FICA tax which is 6.2% Social Security tax and 1.45% Medicare tax in addition to employee salary. Also, they need to pay State and Federal Unemployment Taxes.

Requirement 1:

To Calculate:

The FICA Social Security Taxes Payable withholding of each employee

Expert Solution
Check Mark

Answer to Problem 3BPSB

    EmployeeFICA Social Security Tax
    Ahmed99.20
    Carlos93.93
    Jun29.45
    Marie62.00
    Total284.58

Explanation of Solution

FICA social security tax is payable @6.2% on income up to $128,400

    EmployeeGross Pay through AugGross Pay in current weekGross Pay on which FICA social security tax needs to be paid FICA social security tax needs to be paid
    Ahmed126,8002500

      128400126800=1600

      1600*6.2%=99.20

    Carlos126,8851515

      128400126855=1515

      1515*6.2%=93.93

    Jun6,650475475

      475*6.2%=29.45

    Marie23,70010001000

      1000*6.2%=62

Thus, the FICA Social Security Taxes have been computed for each employee.

To determine

Concept Introduction:

Employee FICA Taxes:

Employee FICA taxes are withheld from salaries by employers to cover Social Security Taxes which is used to cover post retirement or disability expenses and Medicare taxes used to cover medical expenses.

Employer Payroll Taxes An employer needs to pay Employer FICA tax which is 6.2% Social Security tax and 1.45% Medicare tax in addition to employee salary. Also, they need to pay State and Federal Unemployment Taxes.

Requirement 2:

To Calculate:

The FICA Medicare Taxes Payable withholding of each employee

Expert Solution
Check Mark

Answer to Problem 3BPSB

    EmployeeEmployee FICA Medicare Tax
    Ahmed36.25
    Carlos21.97
    Jun6.89
    Marie14.20
    Total79.61

Explanation of Solution

Employee FICA Medicare Taxes are computed @1.45% of gross pay

    EmployeeGross Pay in current weekFICA Medicare Tax
    Ahmed2500

      2500*1.45%=36.25

    Carlos1515

      1515*1.45%=21.97

    Jun475

      475*1.45%=6.89

    Marie1000

      1000*1.45%=14.50

Thus, the Employee FICA Medicare Tax for each employee has been computed .

To determine

Concept Introduction:

Employee FICA Taxes:

Employee FICA taxes are withheld from salaries by employers to cover Social Security Taxes which is used to cover post retirement or disability expenses and Medicare taxes used to cover medical expenses.

Employer Payroll Taxes An employer needs to pay Employer FICA tax which is 6.2% Social Security tax and 1.45% Medicare tax in addition to employee salary. Also, they need to pay State and Federal Unemployment Taxes.

Requirement 3:

To Calculate:

The FICA Social Security Taxes Payable by the Employer

Expert Solution
Check Mark

Answer to Problem 3BPSB

    EmployeeEmployer FICA Social Security Tax
    Ahmed99.20
    Carlos93.93
    Jun29.45
    Marie62.00
    Total284.58

Explanation of Solution

FICA social security tax is payable @6.2% on income up to $128,400

    EmployeeGross Pay through SepGross Pay in current weekGross Pay on which FICA social security tax needs to be paid Employer FICA social security tax needs to be paid
    Ahmed126,8002500

      128400126800=1600

      1600*6.2%=99.20

    Carlos126,8851515

      128400126855=1515

      1515*6.2%=93.93

    Jun6,650475475

      475*6.2%=29.45

    Marie23,70010001000

      1000*6.2%=62

Thus, the Employer FICA Social Security Taxes have been computed.

To determine

Concept Introduction:

Employee FICA Taxes:

Employee FICA taxes are withheld from salaries by employers to cover Social Security Taxes which is used to cover post retirement or disability expenses and Medicare taxes used to cover medical expenses.

Employer Payroll Taxes An employer needs to pay Employer FICA tax which is 6.2% Social Security tax and 1.45% Medicare tax in addition to employee salary. Also, they need to pay State and Federal Unemployment Taxes.

Requirement 4:

To Calculate:

The FICA Medicare Taxes Payable by the Employer

Expert Solution
Check Mark

Answer to Problem 3BPSB

    EmployeeEmployer FICA Medicare Tax
    Ahmed36.25
    Carlos21.97
    Jun6.89
    Marie14.20
    Total79.61

Explanation of Solution

Employer FICA Medicare Taxes are computed @1.45% of gross pay

    EmployeeGross Pay in current weekFICA Medicare Tax
    Ahmed2500

      2500*1.45%=36.25

    Carlos1515

      1515*1.45%=21.97

    Jun475

      475*1.45%=6.89

    Marie1000

      1000*1.45%=14.50

Thus, the Employer FICA Medicare Tax has been computed .

To determine

Concept Introduction:

Employee FICA Taxes:

Employee FICA taxes are withheld from salaries by employers to cover Social Security Taxes which is used to cover post retirement or disability expenses and Medicare taxes used to cover medical expenses.

Employer Payroll Taxes An employer needs to pay Employer FICA tax which is 6.2% Social Security tax and 1.45% Medicare tax in addition to employee salary. Also, they need to pay State and Federal Unemployment Taxes.

Requirement 5:

To Calculate:

The Employer FUTA Taxes Payable by the Employer

Expert Solution
Check Mark

Answer to Problem 3BPSB

    EmployeeEmployer FUTA Tax
    Ahmed0
    Carlos0
    Jun2.10
    Marie0
    Total2.10

Explanation of Solution

Employer FUTA Taxes are computed @0.6% of first $7,000

    EmployeeGross Pay through AugGross Pay in current weekGross Pay on which employer FUTA tax needs to be paid Employer FUTA Tax
    Ahmed126,80025000 as Gross Income >7,0000
    Carlos126,88515150 as Income >7,0000
    Jun6,650475

      70006650=350

      350*0.6%=2.10

    Marie23,70010000 as Income >7,0000

Thus, the Employer FUTA Tax has been computed .

To determine

Concept Introduction:

Employee FICA Taxes:

Employee FICA taxes are withheld from salaries by employers to cover Social Security Taxes which is used to cover post retirement or disability expenses and Medicare taxes used to cover medical expenses.

Employer Payroll Taxes An employer needs to pay Employer FICA tax which is 6.2% Social Security tax and 1.45% Medicare tax in addition to employee salary. Also, they need to pay State and Federal Unemployment Taxes.

Requirement 6:

To Calculate:

The Employer SUTA Taxes Payable by the Employer

Expert Solution
Check Mark

Answer to Problem 3BPSB

    EmployeeEmployer SUTA Tax
    Ahmed0
    Carlos0
    Jun18.90
    Marie0
    Total18.90

Explanation of Solution

Employer SUTA Taxes are computed @5.4% of first $7,000

    EmployeeGross Pay through SepGross Pay in current weekGross Pay on which employer SUTA tax needs to be paid Employer SUTA Tax
    Ahmed126,80025000 as Gross Income >7,0000
    Carlos126,88515150 as Income >7,0000
    Jun6,650475

      70006650=350

      350*5.4%=18.90

    Marie23,70010000 as Income >7,0000

Thus, the Employer SUTA Tax has been computed .

To determine

Concept Introduction:

Employee FICA Taxes:

Employee FICA taxes are withheld from salaries by employers to cover Social Security Taxes which is used to cover post retirement or disability expenses and Medicare taxes used to cover medical expenses.

Employer Payroll Taxes An employer needs to pay Employer FICA tax which is 6.2% Social Security tax and 1.45% Medicare tax in addition to employee salary. Also, they need to pay State and Federal Unemployment Taxes.

Requirement 7:

To Calculate:

The net take home pay of each employee

Expert Solution
Check Mark

Answer to Problem 3BPSB

    EmployeeNet Pay $
    Ahmed2146.55
    Carlos1197.10
    Jun386.66
    Marie835.50
    Total4,565.82

Explanation of Solution

    EmployeeGross Pay in current week (a)FICA Social Security Tax (b)Employee FICA Medicare Tax (c) Income Tax Withheld (d)Insurance Expenses (e)Employee Take home expenses (a-b-c-d-e)
    Ahmed250099.2036.25198202146.55
    Carlos151593.9321.97182201197.10
    Jun47529.456.893220386.66
    Marie100062.0014.206820835.50
    5490284.5879.61480804,565.82

Thus, the net pay for each employee has been computed.

To determine

Concept Introduction:

Employee FICA Taxes:

Employee FICA taxes are withheld from salaries by employers to cover Social Security Taxes which is used to cover post retirement or disability expenses and Medicare taxes used to cover medical expenses.

Employer Payroll Taxes An employer needs to pay Employer FICA tax which is 6.2% Social Security tax and 1.45% Medicare tax in addition to employee salary. Also, they need to pay State and Federal Unemployment Taxes.

Requirement 8:

To Calculate:

The employer's payroll related expense

Expert Solution
Check Mark

Answer to Problem 3BPSB

    EmployeeTotal Payroll Expenses $
    Ahmed2800.45
    Carlos1746.65
    Jun596.09
    Marie1166.50
    Total6,309.69

Explanation of Solution

Employer Payroll expenses include the Gross Salaries and all the State and Federal Taxes and other benefits payable to the employees by the employer.

    EmployeeGross Pay in current week (a)Employer FICA Social Security Tax (b)Employer FICA Medicare Tax (c) Employer FUTA Taxes (d)Employer SUTA Taxes(e)Insurance Expenses (f)Contribution to pension @8% of gross Pay (g)Payroll expenses (a +b+c+d+e+f+g)
    Ahmed250099.2036.2500401252800.45
    Carlos151593.9321.97004075.751746.65
    Jun47529.456.892.1018.904023.75596.09
    Marie100062.0014.200040501166.50
    5490284.5879.612.1018.90160274.506,309.69

Thus, the employer's total payroll expenses relating to each employee has been computed.

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Chapter 11 Solutions

FUNDAMENTAL ACCOUNTING PRINCIPLES

Ch. 11 - Prob. 11DQCh. 11 - Prob. 12DQCh. 11 - Prob. 13DQCh. 11 - Prob. 14DQCh. 11 - Prob. 15DQCh. 11 - Refer to Samsung’s recent balance sheet in...Ch. 11 - Prob. 1QSCh. 11 - Prob. 2QSCh. 11 - QS 11-3 Unearned revenue C2 Ticketsales, Inc.,...Ch. 11 - Interest-bearing note transactions P1 On November...Ch. 11 - Recording employee payroll taxes P2 On January 15,...Ch. 11 - Prob. 6QSCh. 11 - Accounting for bonuses P4 Noura Company offers an...Ch. 11 - Prob. 8QSCh. 11 - Prob. 9QSCh. 11 - Prob. 10QSCh. 11 - Prob. 11QSCh. 11 - Prob. 12QSCh. 11 - Prob. 13QSCh. 11 - Prob. 14QSCh. 11 - Prob. 15QSCh. 11 - Exercise 11-1 Classifying liabilities C1 The...Ch. 11 - Prob. 2ECh. 11 - Exercise 11-3 Accounting for note payable...Ch. 11 - Exercise 11-4 Interest-bearing notes payable with...Ch. 11 - Exercise 11-5 Computing payroll taxes P2 P3 BMX...Ch. 11 - Exercise 11-6 Payroll-related journal entries...Ch. 11 - Exercise 11-7 Payroll-related journal entries...Ch. 11 - Prob. 8ECh. 11 - Exercise 11-9 Computing payroll taxes P2 P3 Mest...Ch. 11 - Prob. 10ECh. 11 - Prob. 11ECh. 11 - Prob. 12ECh. 11 - Prob. 13ECh. 11 - Prob. 14ECh. 11 - Exercise 11-15 Preparing a balance sheet C1 P2...Ch. 11 - Prob. 16ECh. 11 - Prob. 17ECh. 11 - Prob. 18ECh. 11 - Prob. 19ECh. 11 - Problem 11-1A Short-term notes payable...Ch. 11 - Problem 11-2A Entries for payroll transactions P2...Ch. 11 - Problem 11-3A Payroll expenses, withholdings, and...Ch. 11 - Prob. 4APSACh. 11 - Prob. 5APSACh. 11 - Prob. 6APSACh. 11 - Problem 11-1B Short-term notes payable...Ch. 11 - Problem 11-2B Entries for payroll transactions P2...Ch. 11 - Problem 11-3B Payroll expenses, withholdings, and...Ch. 11 - Prob. 4BPSBCh. 11 - Prob. 5BPSBCh. 11 - Prob. 6BPSBCh. 11 - Review the February 26 and March 25 transactions...Ch. 11 - Bug-Off Exterminators provides pest control...Ch. 11 - Prob. 1GLPCh. 11 - Prob. 1AACh. 11 - Key figures for Apple and Google follow. Apple...Ch. 11 - Prob. 3AACh. 11 - BTN 11-3 Cameron Bly is a sales manager for an...Ch. 11 - Prob. 2BTNCh. 11 - Prob. 3BTNCh. 11 - Prob. 4BTNCh. 11 - Prob. 5BTNCh. 11 - Prob. 6BTN
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