PROBLEM #2 – Can someone help me understand this? Thanks! Presented below are th
ID: 2573900 • Letter: P
Question
PROBLEM #2 – Can someone help me understand this? Thanks!
Presented below are the employee payroll records of the Bronsan Company for the week ending November 15, 20XX:
Employee’s Name
YTD Earnings
Curr Week Gross Pay
Fed Inc Tax
Medical Ins Ded.
R. Hawn
$ 25,700
$ 800
$ 155
$ 35
D. Hopkins
930
800
134
35
R. Allen
86,900
1,000
193
42
A. Ingram
18,400
740
128
42
Employee’s FICA taxes are withheld at a rate of 6.2% on the first $87,000 earned for Social Security and 1.45% of all wages for Medicare. Assume a state unemployment tax rate of 5.4% and a federal unemployment tax rate of 0.8% on the first $7,000 for each employee. Prepare the payroll register for the pay period and then prepare the necessary journal entries to record the payroll and payroll taxes.
(Hint: Remember to prepare both employee payroll taxes and employer payroll taxes.)
Payroll Register
Employee
Gross Pay
Fed Inc Tax
Soc Sec Tax
Medicare Tax
Insurance
Net Pay
General Journal
Date
Description
Debit
Credit
Employee’s Name
YTD Earnings
Curr Week Gross Pay
Fed Inc Tax
Medical Ins Ded.
R. Hawn
$ 25,700
$ 800
$ 155
$ 35
D. Hopkins
930
800
134
35
R. Allen
86,900
1,000
193
42
A. Ingram
18,400
740
128
42
Explanation / Answer
Payroll Register Employee Gross Pay Fed Inc. Tax Soc Sec Tax Medicare Tax Insurance Net Pay R. Hawn 800.00 155.00 49.60 11.60 35.00 548.80 D. Hopkins 800.00 134.00 49.60 11.60 35.00 569.80 R. Allen 1,000.00 193.00 6.20 14.50 42.00 744.30 A. Ingram 740.00 128.00 45.88 10.73 42.00 513.39 Total 3,340.00 610.00 151.28 48.43 154.00 2,376.29 Journal Entry Date Particulars Dr. Amt. Cr. Amt. 15-Nov Salaries & Wages Expenses Dr. 3,340.00 To Fed. Inc. Tax payable 610.00 To FICA Tax Payable 151.28 To Medicare Tax Payable 48.43 To Insurance Payable 154.00 To Salaries & Wages Payable 2,376.29 (Record the weekly payroll) 15-Nov Payroll Tax Expenses Dr. To FICA Tax Payable 151.28 To Medicare Tax Payable 48.43 To FUTA Payable 12.32 ($800 + $740) X 0.80% To SUTA Payable 180.36 $3340 X 5.40% (Record the payroll taxes)
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