1.
Calculate the amount that would be reported for the year on each employee’s wage and tax statement for 2015.
1.
Explanation of Solution
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.
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 | $8,250(1) | $1,416(2) | $495.00(3) | $123.75(4) |
Mr. C | $57,600(5) | $9,996(6) | $3,456.00(7) | $864.00(8) |
Mr. E | $24,000(9) | $4,776(10) | $1,440.00(11) | $360.00(12) |
Mr. H | $6,000(13) | $1,070(14) | $360.00(15) | $90.00(16) |
Mr. N | $110,000(17) | $25,850(18) | $6,600.00(19) | $1,650.00(20) |
Mr. S | $116,000(21) | $26,000(22) | $6,960.00(23) | $1,740.00(24) |
Mr. W | $7,830(25) | $1,314(26) | $469.80(27) | $117.45(28) |
Working notes:
(1)
Calculate gross earnings for Mr. A.
(2)
Calculate federal income tax withheld for Mr. A.
(3)
Calculate social security taxes withheld for Mr. A
(4)
Calculate Medicare taxes withheld for Mr. A.
(5)
Calculate gross earnings for Mr. C.
(6)
Calculate federal income tax withheld for Mr. C.
(7)
Calculate social security taxes withheld for Mr. C.
(8)
Calculate Medicare taxes withheld for Mr. C.
(9)
Calculate gross earnings for Mr. E.
(10)
Calculate federal income tax withheld for Mr. E.
(11)
Calculate social security taxes withheld for Mr. E.
(12)
Calculate Medicare taxes withheld for Mr. E.
(13)
Calculate gross earnings for Mr. H.
(14)
Calculate federal income tax withheld for Mr. H.
(15)
Calculate social security taxes withheld for Mr. H.
(16)
Calculate Medicare taxes withheld for Mr. H.
(17)
Calculate gross earnings for Mr. N.
(18)
Calculate federal income tax withheld for Mr. N.
(19)
Calculate social security taxes withheld for Mr. N.
(20)
Calculate Medicare taxes withheld for Mr. N.
(21)
Calculate gross earnings for Mr. S.
(22)
Calculate federal income tax withheld for Mr. S.
(23)
Calculate social security taxes withheld for Mr. S.
(24)
Calculate Medicare taxes withheld for Mr. S.
(25)
Calculate gross earnings for Mr. W.
(26)
Calculate federal income tax withheld for Mr. W.
(27)
Calculate social security taxes withheld for Mr. W.
(28)
Calculate Medicare taxes withheld for Mr. W.
2.
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 11 Solutions
Cengagenow For Financial Accounting
- During the third calendar quarter of 20--, Bayview Inn, owned by Diane R. Peters, employed the persons listed below. Also given are the employees salaries or wages and the amount of tips reported to the owner. The tips were reported by the 10th of each month. The federal income tax and FICA tax to be withheld from the tips were estimated by the owner and withheld equally over the 13 weekly pay periods. The employers portion of FICA tax on the tips was estimated as the same amount. Employees are paid weekly on Friday. The following paydays occurred during this quarter: Taxes withheld for the 13 paydays in the third quarter follow: Based on the information given, complete Form 941 on the following pages for Diane R. Peters. Phone number: (901) 555-7959 Date filed: October 31, 20--arrow_forwardDuring the third calendar quarter of 20--, the Beechtree Inn, owned by Dawn Smedley, employed the persons listed below. Also given are the employees salaries or wages and the amount of tips reported to the owner. The tips were reported by the 10th of each month. The federal income tax and FICA tax to be withheld from the tips were estimated by the owner and withheld equally over the 13 weekly pay periods. The employers portion of FICA tax on the tips was estimated as the same amount. Employees are paid weekly on Friday. The following paydays occurred during this quarter: Taxes withheld for the 13 paydays in the third quarter follow: Based on the information given, complete Form 941 on the following pages for Dawn Smedley. Phone number: (901) 555-7959 Date filed: October 31, 20--arrow_forwardBetween the end of one month and the 15th day of the next month, the balance in the employers business bank account has been getting smaller and smaller. An employee prepares the next payroll and correctly computes the necessary withholding taxes. The employer is supposed to pay accumulated employment taxes on the 15th of the next month. Payday is the last day of the month. However, the employer has used the funds withheld from employees to pay some of the businesss bills. He hopes that enough of the customers who owe him money will pay their outstanding debts. If his assumption is true, the checking account will have enough in it to pay the federal deposit on the 15th of the month. Is the employer acting ethically? After all, he says he intends to have enough money in the account for the deposit. Explain your answer.arrow_forward
- 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_forwardReviewing payroll records indicates that one-fifth of employee salaries that are due to be paid on the first payday in January, totaling $15,000, are actually for hours worked in December. There was no previous balance in the Salaries Payable account at that time. Based on the information provided, make the December 31 adjusting journal entry to bring the balances to correct.arrow_forwardWallace Corporation summarizes the following information from its weekly payroll records during April. Prepare the two journal entries to record the payment of the payroll and the accrual of its payroll taxes for April. Assume an 8% FICA rate for both employees and the employer. Also assume a 5.4% state unemployment tax rate, a 0.6% federal unemployment tax rate, and that all wages are subject to all payroll taxes. Round to the nearest dollar.arrow_forward
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage Learning
- Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage LearningCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,College Accounting, Chapters 1-27 (New in Account...AccountingISBN:9781305666160Author:James A. Heintz, Robert W. ParryPublisher:Cengage Learning