Question 1: Company DEF has three employees and does the payroll every Friday. Determine the gross pay, total deductions and net pay for each employee. Use the following for FICA: Cap = $100,000, rates are 6% for social security and 1.5% for Medicare.
Steve--worked 45 hours and earns $30/hour. His year to date earnings are $99,300. Besides FICA he has deductions of $250 for federal income tax, $125 for state income tax and $75 for union dues.
Mary---worked 45 hours and earns a salary of $52,000 per year. Her year to date earnings are $43,200. Besides FICA she has deductions of $185 in federal income tax, $100 for state income tax, and $40 for her medical insurance premium.
Pete----worked 30 hours and earns $20 per hour. His year to date earnings are $24,435. besides FICA he has deductions of $70 for federal income tax, $42 for state income tax and $25 for union dues.
Question 2:
The following totals appear in the payroll register of Company ABC. of our employees. These are the totals of all employees.
Gross Pay..........................$25,000
Social security...................$1500
Medicare...........................$375
Federal income tax............$4500
State income tax...............$2000
Union dues.......................$150
Medical Premium..............$200
Total deductions..............$8725
Net Pay..........................$16,275
All employee wages are subject to FUT and SUT. Our SUT rate is 5% and our FUT rate is 1%.
Prepare the journal entries to record the payroll, pay the payroll, and record the payroll taxes.
Question 3: Provide the necessary adjusting entries for December 31
1. Wages owed to our employees totaled $2400.
2. Depreciation on our truck was $1200.
3. Supplies used for the period was $500
4. Insurance expired was $1300.
5. Income tax owed but not yet paid was $10,000.