Wage and Tax Statement Data on Employer FICA Tax Ehrlich Co. began business on J

Question

Wage and Tax Statement Data on Employer FICA Tax Ehrlich Co. began business on January 2. Salaries were pald 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 the following year, 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% 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 Employee Date First Employed Monthly Salary Monthly Income Tax Withheld Amett Cruz Edwards Harvin Nicks Nov. 16 Jan. 2 Oct. 1 Dec. 1 Feb. 1 Mar. 1 Nov. 16 $3,400 5,700 2,800 2,200 10,300 3,100 8,100 $503 1,072 347 273 2,318 474 1,750 Ward 110S F12 Insert Ba

Explanation / Answer

Medicare Tax withheld 1.5%

1) Employee Gross earnings Federal Income tax withheld Social Security Tax Withheld 6%

Medicare Tax withheld 1.5%

arnett 3400 503 204 51 cruz 5700 1072 342 85.5 edwards 2800 347 168 42 harvin 2200 273 132 33 nicks 10300 2318 618 154.5 shiancoe 3100 474 186 46.5 ward 8100 1750 486 121.5 TOTAL 6737 2136 534 2) Employee Gross earnings Federal Income tax withheld Social Security Tax Withheld 6% Medicare Tax withheld 1.5% State Unempl compensation 5.4% Federal Unemploy compensation 0.8% arnett 3400 503 204 51 183.6 27.2 cruz 5700 1072 342 85.5 307.8 45.6 edwards 2800 347 168 42 151.2 22.4 harvin 2200 273 132 33 118.8 17.6 nicks 10300 2318 618 154.5 556.2 82.4 shiancoe 3100 474 186 46.5 167.4 24.8 ward 8100 1750 486 121.5 437.4 64.8 TOTAL 6737 2136 534 1922.4 284.8

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