BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

Solutions

Chapter
Section
BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
1 views

Payroll Accounting

Jet Enterprises has the following data available for its April 30, 2019, payroll:

Chapter 8, Problem 74APSA, Payroll Accounting Jet Enterprises has the following data available for its April 30, 2019, payroll:

*All subject to Social Security and Medicare matching and withholding of 6.2% and 1.45%, respectively.

Federal unemployment taxes of 0.70% and state unemployment taxes of 0.90% are payable on $405,700 of the wages earned.

Required:

1. Compute the amounts of taxes payable and the amount of wages that will be paid to employees. Then prepare the journal entries to record the wages earned and the payroll taxes. ( Note: Round to the nearest penny.)

2. CONCEPTUAL CONNECTION Jet would like to hire a new employee at a salary of $65,000. Assuming payroll taxes are as described above (with unemployment taxes paid on the first $9,000) and fringe benefits (e.g., health insurance, retirement, etc.) are 25% of gross pay, what will be the total cost of this employee for Jet?

To determine

(a)

Introduction:

Employer withhold a part of employee’s gross pay and pay a part from their end as employee’s share of taxes and employer’s share of taxes, respectively to the concerned authority.

To prepare:

Journal entries.

Explanation

a) Social Security Taxes are calculated at a stated rate of 6.2% whereas Medicare taxes are calculated at a stated rate of 1.45%.

Total Wage = $485,000

Social Security Taxes = $485,000×6.2%=$30,070

Medicare Taxes = $485,000×1.45%=$7,032.5

Federal Income Taxes withheld = $92,300

Cash Paid = Total Wage − (Social Security Taxes + Medicare Taxes + Federal Income Taxes withheld)

Cash Paid = $485,000 − ($30,070 + $7,032.5 + $92,300)

Cash Paid = $485,000 - $129,402.5 = $355,597.5

b) Social Security Taxes are calculated at a stated rate of 6.2% whereas Medicare taxes are calculated at a stated rate of 1.45%.

Total Wage = $485,000

Social Security Taxes = $485,000×6

To determine

(b)

Introduction:

Employer withhold a part of employee’s gross pay and pay a part from their end as employee’s share of taxes and employer’s share of taxes, respectively to the concerned authority.

To calculate:

The cost of new employee.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

How would you model Question 6 with an OODM? (Use Figure 2.4 as your guide.)

Database Systems: Design, Implementation, & Management

What is physical independence?

Database Systems: Design, Implementation, & Management

List five things a driver of a BEV can do to extend the driving range of the vehicle.

Automotive Technology: A Systems Approach (MindTap Course List)

The mass moment of inertia I of a disk is given by I=12mr2 where m is the mass of the disk and r is the radius....

Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)

Define an attribute, and provide three examples.

Systems Analysis and Design (Shelly Cashman Series) (MindTap Course List)

What is a cross-platform application?

Enhanced Discovering Computers 2017 (Shelly Cashman Series) (MindTap Course List)