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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Lisa Meilo works for Pacific Company, which pays its employees time-and-a-half for all hours worked in excess of 40 per week-Meilo’s pay rate is $37 per hour. Her wages are subject to federal income tax, a Social Security tax deduction at the rate of 6.2 percent, and a Medicare tax deduction at the rate of 1.45 percent. She is married and claims three allowances. Meilo has an unpaid half-hour lunch break during an 814-hour day. In the most recent pay period, she worked 50 hours. Meilo’s beginning cumulative earnings are $73,654.

Complete the following:

images

To determine

Complete and fill the banks with payroll calculations for the week.

Explanation

Payroll:

Payroll refers to the total amount that is required to be paid by the company to its employees during a week, month or other period. It is the financial record of the wages and bonus, net pay, salary and deductions of a company’s employees.

Complete and fill the banks with payroll calculations for the week.

(Figure 1)

Working Notes:

(1) Calculate the overtime hours:

Overtime hours for the week = Hours worked Actual hours allowed to be worked =5040=10 Hours

 (2) Calculate the per hour rate for overtime:

Total rate of overtime=Regular pay rate  ×(1.5 times increase in for hours worked over 40 a week)=$37

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