Use the information provided below to (a) complete the table, (b) calculate the

Question

Use the information provided below to (a) complete the table, (b) calculate the 3 employer's payroll taxes, and (c) record the payroll taxes in the journal 4 Information from the payroll register of Cool Company for the week ended April 21, 20-, is shown in the table below. The SUTA rate is 5.4% and the FUTA rate is 0.8%, both on the first $7,000 of earnings. Social Security is 6.2% of the first 5 $106,800 of earnings. Medicare is 1.45% of gross earnings 6 7 a. Complete the last 2 columns on the table: 8 Taxable Earnings Current Taxable Employee Cumulative Pay before Weekly Unemployme Earnings Social Earnings nt Security 9 Name 10 11 L. Smith 12 K. Jones 13 T. Lawyer 14 B. Richards 15 C. Sooner 16 Current Earnings 3,500 1,600 2,600 5,900 108,7004,000 17.600 104,000 6,000 6,900 $ 89.200 Totals

Explanation / Answer

a. Employee Name Cumulative pay before current earnings Current weekly earnings Taxable earnings unemployment Taxable earnings Social security L Smith 104000 3500 0 2800 (106800-104000) K Jones 6000 1600 1000 1600 (7000-6000) T Lawyer 6900 2600 100 2600 (7000-6900) B Richards 89200 5900 0 5900 C Sooner 108700 4000 0 0 17600 b. Calculation of payroll taxes for the week: Employee Name Current weekly earnings Taxable earnings unemployment Taxable earnings Social security SUTA FUTA Social security Medicare 1 2 3 2*5.4% 2*0.8% 3*6.2% 1*1.45% L Smith 3500 0 2800 0 0 173.6 50.75 (106800-104000) K Jones 1600 1000 1600 54 8 99.2 23.2 (7000-6000) T Lawyer 2600 100 2600 5.4 0.8 161.2 37.7 (7000-6900) B Richards 5900 0 5900 0 0 365.8 85.55 C Sooner 4000 0 0 0 0 0 58 17600 59.4 8.8 799.8 255.2 c. Date Account titles Debit Credit Wage expense 17600 Social security payable 799.8 Medicare payable 255.2 Wages payable 16545 (Payment of paycheck due) Payroll tax expense 1123.2 Social security payable 799.8 Medicare payable 255.2 SUTA payable 59.4 FUTA payable 8.8 (Payroll taxes due)

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