age and Tax Statement Data on Employer FICA Tax Ehrlich Co. began business on Ja
ID: 2523599 • Letter: A
Question
age and Tax Statement Data on Employer FICA Tax
Ehrlich Co. began business on January 2, 20Y8. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal income tax were withheld in the required amounts. An employee who is hired in the middle of the month receives half the monthly salary for that month. All required payroll tax reports were filed, and the correct amount of payroll taxes was remitted by the company for the calendar year. Early in 20Y9, before the Wage and Tax Statements (Form W-2) could be prepared for distribution to employees and for filing with the Social Security Administration, the employees' earnings records were inadvertently destroyed.
None of the employees resigned or were discharged during the year, and there were no changes in salary rates. The social security tax was withheld at the rate of 6.0% and Medicare tax at the rate of 1.5%. Data on dates of employment, salary rates, and employees’ income taxes withheld, which are summarized as follows, were obtained from personnel records and payroll records:
Required:
1. Calculate the amounts to be reported on each employee's Wage and Tax Statement (Form W-2) for 20Y8.
Note: Round amounts to the nearest whole dollar and enter all amounts as positive values.
2. Calculate the following employer payroll taxes for the year: (a) social security; (b) Medicare; (c) state unemployment compensation at 5.4% on the first $10,000 of each employee’s earnings; (d) federal unemployment compensation at 0.6% on the first $10,000 of each employee’s earnings; (e) total.
Note: Round amounts to the nearest whole dollar and enter all amounts as positive values.
Employee Date First
Employed Monthly
Salary Monthly Income
Tax Withheld Arnett Jan. 2 $3,400 $476 Cruz Oct. 1 5,400 972 Edwards Apr. 16 2,900 363 Harvin Nov. 1 2,400 300 Nicks Jan. 16 5,650 1,271 Shiancoe Dec. 1 3,200 496 Ward Feb. 1 6,200 1,333
Explanation / Answer
Answer 1 Employee Gross earning Federal Income Tax Withheld Social Security tax withheld Medicare tax withheld Amount($) total Amount($) Total($) (6%*G.E) G*1.5% Arnett 3400*12 40800 476*12 5712 2448 612 Cruz 5400*3 16200 972*3 2916 972 243 Edwards 2900*8.5 24650 363*8.5 3086 1479 369.75 Harvin 2400*2 4800 300*2 600 288 72 Nicks 5650*11.5 64975 1271*11.5 14617 3,899 974.625 Shiancoe 3200*1 3200 496*1 496 192 48 Ward 6200*11 68200 1333*11 14663 4092 1023 Total 2E+05 42090 13369.5 3342.375 2E+05 Answer 2 Social Security tax withheld $13369.5 Medicare tax withheld $3342.38 state unemployment compensation at 5.4% on the first $10,000 o 10000*5(3200+4800)*5.4% $3132 Federal Unemployment compensation tax on first $10000 10000*5(3200+4800)*.6% $348 TOTAL $20191.88
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