Wage and Tax Statement Data on Employer FICA Tax Gridiron Concepts Co. began bus
ID: 2463530 • Letter: W
Question
Wage and Tax Statement Data on Employer FICA Tax
Gridiron Concepts Co. began business on January 2, 2013. 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 2014, 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% on the first $100,000 of salary 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:
Required:
1. Calculate the amounts to be reported on each employee's Wage and Tax Statement (Form W-2) for 2013. Enter amounts to the nearest cent if required. Enter all amounts as positive numbers.
2. Calculate the following employer payroll taxes for the year: (a) social security; (b) Medicare; (c) state unemployment compensation at 4.8% on the first $8,000 of each employee's earnings; (d) federal unemployment compensation at 0.8% on the first $8,000 of each employee's earnings; (e) total.
Employee Date First Employed Monthly Salary Monthly Income Tax Withheld Brooks Jan. 2 $3,100 $459 Croom Oct. 1 5,100 959 Fulmer Apr. 16 2,900 360 Johnson Nov. 1 2,600 322 Nutt Jan. 16 9,900 2,228 Richt Dec. 1 3,300 505 Spurrier Feb. 1 8,800 1,901Explanation / Answer
1. W2 filing Employees Date First Employed Monthly salary Monthly Income tax withheld Months worked Gross earnings Federal income tax withheld Social Security tax Medicare tax Brooks 2-Jan-16 $3,100 $459 12.0 $37,200.00 $5,508.00 $2,232.00 $558.00 Cromm 1-Oct-16 $5,100 959 3.0 $15,300.00 $2,877.00 $918.00 $229.50 Fulmer 16-Apr-16 $2,900 360 8.5 $24,650.00 $3,060.00 $1,479.00 $369.75 Jhonson 1-Nov-16 $2,600 322 2.0 $5,200.00 $644.00 $312.00 $78.00 Nutt 16-Jan-16 $9,900 2228 11.5 $113,850.00 $25,622.00 $6,000.00 $1,707.75 Richt 1-Dec-16 $3,300 505 1.0 $3,300.00 $505.00 $198.00 $49.50 Spurrier 1-Feb-16 $8,800 1901 11.0 $96,800.00 $20,911.00 $5,808.00 $1,452.00 2. Employer's tax (a) (b) (d) (e) Social Security tax Medicare tax state unemployment compensation federal unemployment compensation Total 2,232.00 558.00 $384.00 $64.00 $3,238.00 918.00 229.50 $384.00 $64.00 $1,595.50 1,479.00 369.75 $384.00 $64.00 $2,296.75 312.00 78.00 $249.60 $41.60 $681.20 6,000.00 1,707.75 $384.00 $64.00 $8,155.75 198.00 49.50 $158.40 $26.40 $432.30 5,808.00 1,452.00 $384.00 $64.00 $7,708.00
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