Jocame Inc. began business on january 2,2013. salaries were paid to employees on

Question

Jocame Inc. 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 payrol taxes taxes was remitted by the company for the calender year. early in 2014, before the wage and tax satements( form W2) 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% and medicare tax at the rate of 1.5% on salary. data on dates of employment employment , salary rates, and employees income tax withheld , which are summarized as follows, were obtained from personal records and payroll records.

Employees                        Date first employed                   Monthly Salary                    Monthly Income Withheld

Addai                                      July 16                                        $8,160                                       $1,704

Kasay                                           June 1                                        3,600                                    533

McGahee                                        Feb 16                                         6,420                                    1,238

Moss                                               Jan 1                                             4,600                                     783

Stewart                                             Dec 1                                            4,500                                     758

Tolbert                                               Nov 16                                          3,250                                    446

Wells                                                    May 1                                          10,500                                   2,359

Instructions:

1. Calculate the amounts to be reported on each employees wage and tax statement (form W2) for 2013, arranging the data in the following form:

Employees          Gross Earnings             Federal Income tax withheld           Social security tax withheld         medicare tax withheld

2. calculate the following employer payroll taxes for the year :(a) Social security , (b) medicare, (c) state unemployment at 5.4% on the first $10,000 of each employees earnings, ( d) federal unemployment compensation at 0.8% on the first $10,000 of each employees earnings, (e) total.

Explanation / Answer

Calculation of SUTA and FUTA

Name Taxable Amount SUTA(5.4%) FUTA(0.8%) Addai 10,000 540 80 Kasay 10,000 540 80 Mcgahee 10,000 540 80 Moss 10,000 540 80 Stewart 4,500 243 36 Tolbert 4,875 263.25 39 Wells 10,000 540 80 Total 3,206.25 475

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