Exercises
Ex. 28
Ann Hech's regular hourly wage is $18 an hour. She receives overtime pay at the rate of time and a half. The FICA tax rate is 7.65%. Ann is paid every two weeks. For the first pay period in January, Ann worked 86 hours of which 6 were overtime hours. Ann's federal income tax withholding is $400 and her state income tax withholding is $170. Ann has authorized that $50 be withheld from her check each pay period for savings bonds.
Instructions
Compute Ann Hech's gross earnings and net pay for the pay period showing each payroll deduction in arriving at net pay.
Gross Earnings$1,602.00
State Income Taxes Payable170.00
FICA Taxes Payable 122.55
Savings Bonds Payable 50.00 742.55
Ex. 29
Warren Company's payroll for the week ending January 15 amounted to $200,000 for salaries and wages. None of the employees has reached the earnings limits specified for federal or state employer payroll taxes. The following deductions were withheld from employees' salaries and wages:
Federal Income Tax$45,000
State Income Tax9,000
FICA Taxes15,300
Union Dues2,700
United Fund1,800
Federal unemployment tax (FUTA) rate is 6.2% less a credit equal to the rate paid for state unemployment taxes. The state unemployment tax (SUTA) rate is 5.4%.
Instructions
Prepare the journal entries to record the weekly payroll ending January 15 and the employer’s payroll tax expense on the payroll for January 15.