Exercise I-3 (Part Level Submission) Ramirez Company has the following data for

Question

Exercise I-3 (Part Level Submission) Ramirez Company has the following data for the weekly payroll ending January 31. Federal Hours Hourly Income Tax Health Employee M T W T F s Rate Withholding Insurance L. Helton 8 8 9 8 10 3 $12 R. Kenseth 8 8 8 8 8 214 D. Tavaras 15 $34 37 58 $10 25 25 9 108 8 9 0 Employees are paid 1 ½ times the regular hourly rate for all hours worked in excess of 40 hours per week. FICA taxes are 7.65% on the first $117,000 of gross earnings. Ramirez Company is subject to 5.4% state unemployment taxes and 0 896 federal unemployment taxes on the first S? 00 of gross earnings.

Explanation / Answer

The Table is filled below and explaination given below.  

FICA TAXES

(gross pay*0.0765)

Federal Income

Tax

Net Pay

(grosspay-Total deductions)

Where you went wrong

-Regular payment are calculted based on individual Hourly rate for eg:Kenseth $14

-FICA Taxes is particularly mention at a rate of 7.65% on gross pay. You may have followed gross pay less insurance then applied rate is not required.

Earnings Deduction Employees Total Hours Regular Overtime(1.5times extra) Gross Pay

FICA TAXES

(gross pay*0.0765)

Federal Income

Tax

Health Insurance Total Deductions

Net Pay

(grosspay-Total deductions)

L.Holton 46 (40*$12)=480 ($12*1.5*6)=108 480+108=588 (588*0.0765)=44.98 34 10 44.98+34+10=88.98 499.02 R.Kenseth 42 (40*$14(rate fr Kenseth))=560 ($14*1.5*2)=42 560+42=602 (602*0.0765)=46.05 37 25 108.05 493.95 D.Tavaras 44 (40*$15(hourly rate))=600 ($15*1.5*4)=90 600+90=690 (690*0.0765)=52.79 58 25 135.79 554.21 Total 1640 240 1,880 143.82 129 60 (332.82) 1547.18

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