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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

TruGreen is the world’s largest lawn and landscape company, employing over 10,000 employees and serving more than 1.7 million customers.

The Pawtucket Red Sox is a minor league baseball affiliate of the Boston Red Sox. The team’s current roster consists of 25 active players, along with the team’s manager, coaches, and mascots.

Hock It To Me is a privately owned pawn shop. The company has annual revenue of less than $500,000 and employs a staff of one to four people.

Even though each of these businesses has a unique payroll due to different amounts of salaries or wages, benefits, and withholdings, explain why each business needs to (a) accurately calculate the amount of payroll for each employee, (b) determine the amount of payroll taxes for which the employer is liable, (c) make the payroll tax deposits as required, and (d) file the appropriate payroll tax returns on a timely basis.

To determine

State the reason under which each business is required to (a) accurately calculate the amount of payroll for each employee, (b) determine the amount of payroll taxes for which the employer is liable, (c) make the payroll tax deposits as required and (d) file the appropriate payroll tax returns on a timely basis.

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.

(a) A company is required to calculate the amount of payroll for each employee as it is important in reporting the financial statement, reporting to government agencies, reporting to worker’s compensation insurance carriers and employee morale.

(b) Employer must be aware of the current tax laws and the regulations that affect the payroll as the employer is responsible for making accurate payroll taxes...

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