Concept explainers
Exercise 11-9 Computing payroll taxes P2 P3
Mest Company has nine employees. FICA Social Security taxes are 6.2% of the Erst SI 28.400 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first S7:000 paid to each employee. Cumulative pay for the current year for each of its employees follows.
Employee Cumulative Pay Employee Cumulative Pay Employee Cumulative Pay
KenS............ $ 6,000 Michelle W........ $143,500 Loci K............ $130,900
TimV............. 40.400 MichaelM........ 106.900 Kitty 0............ 3G.900
Steve S........... 87,000 Zach P............ 123.400 John W........... 4,000
a. Prepare a table with the following six column headings. Compute the amounts in this table for each employee and then total the numerical columns.
Pay Subject to | Pay Subject | Pay Subject | Pay Subject | ||
Cumulative | FICA Social | to FICA | to FUTA | to SUTA | |
Employee | Pay | Security | Medicare | Tones | Taxes |
b. For the company, compute each total for FICA Social Security taxes. FICA Medicare taxes. FUTA taxes, and SUTA taxes. Him: Remember to include in those totals any employee share of taxes that the company must collect. Round amounts to cents.
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Chapter 11 Solutions
FUNDAMENTAL ACCOUNTING PRINCIPLES
- Calculate payroll An employee earns 44 per hour and 1.5 times that rate for all hours in excess of 40 hours per week. If the employee worked 51 hours during the week, determine the employees (A) gross pay and (B) net pay for the week. Assume that the social security tax rate is 6.0%, the Medicare tax rate is 1.5%, and the employees federal income tax withheld is 403arrow_forwardWage and tax statement data on employer FICA tax Ehrlich Co. began business on January 2. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal income tax were withheld in the required amounts. An employee who is hired in the middle of the month receives half the monthly salary for that month. All required payroll tax reports were filed, and the correct amount of payroll taxes was remitted by the company for the calendar year. Early in the following year, before the Wage and Tax Statements (Form W-2) could be prepared for distribution to employees and for filing with the Social Security Administration, the employees earnings records were inadvertently destroyed. None of the employees resigned or were discharged during the year, and there were no changes in salary rates. The social security tax was withheld at the rate of 6.0% and Medicare tax at the rate of 1.5% on salary. Data on dates of employment, salary rates, and employees income taxes withheld, which are summarized as follows, were obtained from personnel records and payroll records: Employee Date First Employed Monthly Salary Monthly Income Tax Withheld Arnett Nov. 16 5,500 944 Cruz Jan. 2 4,800 833 Edwards Oct. 1 8,000 1,592 Harvin Dec. 1 6,000 1,070 Nicks Feb. 1 10,000 2,350 Shiancoe Mar. 1 11,600 2,600 Ward Nov. 16 5,220 876 Instructions 1.Compute the amounts to he reported for the year on each employees Wage and Tax Statement (Form W-2), arranging the data as follows (round to the nearest cent): Employee Gross Earnings Federal Income Tax Withheld Social Security Tax Withheld Medicare Tax Withheld 2.Compute the following employer payroll taxes for the year: (A) social security, (B) Medicare, (C) state unemployment compensation at 5.4% on the first 10,000 of each employees earnings, (D) federal unemployment compensation at 0.8% on the first 10,000 of each employees earnings, (E) total.arrow_forward
- Corporate Financial AccountingAccountingISBN:9781305653535Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
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