The following data for Throwback Industries Inc. relate to the payroll for the w
ID: 2467637 • Letter: T
Question
The following data for Throwback Industries Inc. relate to the payroll for the week ended December 9, 2016:
Employee
Hours Worked
Hourly Rate
Weekly Salary
Federal Income Tax
U.S. Savings Bonds
Aaron
43
$70
$689.44
$125
Cobb
43
58
539.92
135
Clemente
45
64
668.44
145
DiMaggio
39
52
377.80
0
Griffey, Jr.
48
64
749.08
155
Mantle
$1,700
317.45
145
Robinson
38
53
387.32
155
Williams
2,100
426.24
150
Vaughn
48
64
770.08
60
Employees Mantle and Williams are office staff, and all of the other employees are sales personnel. All sales personnel are paid 1½ times the regular rate for all hours in excess of 40 hours per week. The social security tax rate is 6.0%, and Medicare tax is 1.5% of each employee’s annual earnings. The next payroll check to be used is No. 901.
Required:
1.
Prepare a payroll register for Throwback Industries Inc. for the week ended December 9, 2016. Assume the normal working hours in a week are 40 hours. Enter amounts as positive numbers and round your intermediate calculations and final answers to the nearest whole cent (two decimal places).
2.
Journalize the entry to record the payroll for the week. If required, round your answers to two decimal places. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
Throwback Industries
General Ledger
ASSETS
110
Cash
111
Accounts Receivable
112
Interest Receivable
113
Notes Receivable
115
Merchandise Inventory
116
Supplies
118
Prepaid Insurance
120
Land
123
Building
124
Accumulated Depreciation-Building
125
Office Equipment
126
Accumulated Depreciation-Office Equipment
LIABILITIES
210
Accounts Payable
213
Interest Payable
214
Notes Payable
215
Salaries Payable
216
Social Security Tax Payable
217
Medicare Tax Payable
218
Employees Federal Income Tax Payable
221
Bond Deductions Payable
224
Federal Unemployment Tax Payable
225
State Unemployment Tax Payable
EQUITY
310
Owner, Capital
311
Owner, Drawing
312
Income Summary
REVENUE
410
Sales
610
Interest Revenue
EXPENSES
510
Cost of Merchandise Sold
520
Office Salaries Expense
521
Sales Salaries Expense
524
Depreciation Expense-Building
525
Delivery Expense
526
Repairs Expense
529
Selling Expenses
531
Rent Expense
532
Depreciation Expense-Office Equipment
533
Insurance Expense
534
Supplies Expense
535
Payroll Tax Expense
538
Cash Short and Over
539
Product Warranty Expense
540
Miscellaneous Expense
710
Interest Expense
1. Prepare a payroll register for Throwback Industries Inc. for the week ended December 9, 2016. Assume the normal working hours in a week are 40 hours. Enter amounts as positive numbers and round your intermediate calculations and final answers to the nearest whole cent (two decimal places).
Payroll for Week Ending December 9, 2016
1
Earnings
Earnings
Earnings
Deductions
Deductions
Deductions
Deductions
Deductions
Paid
Paid
Account Debited
Account Debited
2
Employee
Total Hours
Regular
Overtime
Total
Social Security Tax
Medicare Tax
Federal Income Tax
U.S. Savings Bond
Total
Net Pay
Ck. No.
Sales Salaries Expense
Office Salaries Expense
3
Aaron
43.00
$689.44
$125.00
#901
4
Cobb
43.00
539.92
135.00
#902
5
Clemente
45.00
668.44
145.00
#903
6
DiMaggio
39.00
377.80
#904
7
Griffey, Jr.
48.00
749.08
155.00
#905
8
Mantle
317.45
145.00
#906
9
Robinson
38.00
387.32
155.00
#907
10
Williams
426.24
150.00
#908
11
Vaughn
48.00
770.08
60.00
#909
12
$4,925.77
$1,070.00
2. Journalize the entry to record the payroll for the week. If required, round your answers to two decimal places. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
3
4
5
6
7
Employee
Hours Worked
Hourly Rate
Weekly Salary
Federal Income Tax
U.S. Savings Bonds
Aaron
43
$70
$689.44
$125
Cobb
43
58
539.92
135
Clemente
45
64
668.44
145
DiMaggio
39
52
377.80
0
Griffey, Jr.
48
64
749.08
155
Mantle
$1,700
317.45
145
Robinson
38
53
387.32
155
Williams
2,100
426.24
150
Vaughn
48
64
770.08
60
Explanation / Answer
1 Earnings Earnings Earnings Deductions Deductions Deductions Deductions Deductions Paid Paid Account Debited Account Debited 2 Employee Total Hours Hourly Rate($)/weekly salary Regular Overtime @ 1.5 of regular rate Total Social Security Tax 6.0% Medicare Tax 1.5% Federal Income Tax U.S. Savings Bond Total Net Pay Ck. No. Sales Salaries Expense Office Salaries Expense 3 Aaron 43 70 2800 315 3115 186.90 46.73 $689.44 $125.00 1048.07 2066.94 #901 3115 4 Cobb 43 58 2320 261 2581 154.86 38.72 539.92 135 868.50 1712.51 #902 2581 5 Clemente 45 64 2560 480 3040 182.40 45.60 668.44 145 1041.44 1998.56 #903 3040 6 DiMaggio 39 52 2028 2028 121.68 30.42 377.8 529.90 1498.10 #904 2028 7 Griffey, Jr. 48 64 2560 768 3328 199.68 49.92 749.08 155 1153.68 2174.32 #905 3328 8 Mantle 1700 1700 1700 102.00 25.50 317.45 145 589.95 1110.05 #906 1700 9 Robinson 38 53 2014 2014 120.84 30.21 387.32 155 693.37 1320.63 #907 2014 10 Williams 2100 2100 2100 126.00 31.50 426.24 150 733.74 1366.26 #908 2100 11 Vaughn 48 64 2560 768 3328 199.68 49.92 770.08 60 1079.68 2248.32 #909 3328 Total 4225 20642 2592 23234 1394.04 348.51 $4,925.77 $1,070.00 7738.32 15495.68 19434 3800 Over time earnings is calculated on excess hours worked X normal Rate per hours X 1.5 Social Security and Medicare deuction are made through total earnings JOURNAL DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 Dec,9,2016 Office Salaries Expense 520 3800 Sales Salaries Expense 521 19434 Social Security Tax Payable 216 1394.04 Medicare Tax Payable 217 348.51 Employees Federal Income Tax Payable 218 $4,925.77 Bond Deductions Payable 221 $1,070.00 Salaries Payable 215 $15,495.68 ( Being Salary Exp Recognised) 2 Dec,9,2016 Salaries Payable 215 $15,495.68 Cash 110 $15,495.68 ( Being salary paid to employees)
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