Ex. 30
Sam Geller had earned (accumulated) salary of $99,000 through November 30. His December salary amounted to $9,000. Lara Lane began employment on December 1 and will be paid her first month's salary of $6,000 on December 31. Income tax withholding for December for each employee is as follows:
Sam GellerLara Lane
Federal Income Tax$2,680$1,200
State Income Tax490240
The following payroll tax rates are applicable:
FICA tax on first $106,8007.65% (1.45% over $106,800)
FUTA tax on first $7,0006.2%*
SUTA tax on first $7,0005.4%
*Less a credit equal to the state unemployment contribution
Instructions
Record the payroll for the two employees at December 31 and record the employer's share of payroll tax expense for the December 31 payroll.
Ex. 31
Assume that the payroll records of Erroll Oil Company provided the following information for the weekly payroll ended November 26, 2014.
Year-to-Date
HourlyFederalEarnings Through
EmployeeHours WorkedPay RateIncome TaxUnion Dues Previous Week
C. Young40$55$4329$108,000
J. Ward461065$523,200
K. Hurt4418126—5,100
M. King 4222169749,500
Additional information: All employees are paid overtime at time and a half for hours worked in
excess of 40 per week. The FICA Tax rate is 7.65% for the first $106,800 of each employee's
annual earnings. The employer pays unemployment taxes of 6.2% (5.4% for state and .8% for federal) on the first $7,000 of each employee's annual earnings.
Instructions
(a)Prepare the payroll register for the pay period.
(b)Prepare general journal entries to record the payroll and payroll taxes.