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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

Jim Moss, an employee of Jones International, worked 49 hours during the week of April 4 through 10. His rate of pay is $15 per hour, and he receives time and a half for work in excess of 40 hours per week. Jim is married and claims four allowances on his W-4 form. Jims YTD earnings before this pay period are $7,600, and his wages are subject to the following deductions:

  1. a. Federal income tax (use the table in Figure 3, pages 293-294).
  2. b. Social Security tax at 6.2 percent, with a wage limit of $ 118,500.
  3. c. Medicare tax at 1.45 percent.
  4. d. Medical insurance premium (after tax), $50.
  5. e. United Way contribution, $ 10.

Required

Compute Jim’s regular pay, overtime pay, gross pay, and net pay.

To determine

Calculate the regular pay, overtime pay, gross pay and net pay of Person J.

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.

Calculate the regular pay, overtime pay, gross pay and net pay of Person J.

ParticularsHours×RateAmount in $
Regular pay40×$15.00 $600.00
Overtime pay9×(1) $22.50$202.25
Gross pay   $802.50

(Table 1)

Particulars Amount in $
Gross pay $802.50
Less: Federal income tax$33.00 
          Social Security tax  ($802.50×6.2%)$49.76 
          Medicare tax ($802

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