Sam Redd is paid $15 per hour for a 40-hour work week with time-and-a-half for o
ID: 2567812 • Letter: S
Question
Sam Redd is paid $15 per hour for a 40-hour work week with time-and-a-half for overtime, which is not charged to specific jobs. For the week of March 4 - 10, Tyler’s labor time record was as follows:
Mon
Tues
Wed
Thur
Fri
Sat
Total
Job B280
8
5
6
10
10
2
41
Machine maintenance
4
2
1
7
Total
8
9
8
10
10
3
48
Other Information:
Sam’s year-to-date wages as of March 3 were $7,500. He contributes $20 weekly for his health insurance premiums.
Current tax rates in effect are: FIT withholding rate - 10%; FICA - 8% on the first $100,000 of wages; SUTA - 4% on the first $8,000 of wages; and FUTA - 1% on the first $8,000 of wages.
(a) Calculate Sam’s gross and net pay.
(b) Prepare the journal entries necessary to
(1) Record Sam’s payroll
(2) Pay Sam’s payroll
(3) Distribute Sam’s payroll to the appropriate accounts
(c) Calculate the employer’s payroll taxes and prepare the journal entry to record them employer’s portion of payroll taxes
Mon
Tues
Wed
Thur
Fri
Sat
Total
Job B280
8
5
6
10
10
2
41
Machine maintenance
4
2
1
7
Total
8
9
8
10
10
3
48
Explanation / Answer
Solution:
a) Calculation of the Sam's Gross and Net Pay:
b) Preparing the Journal Entries Necessary to the Following Transactions:
c) Calculation of the Employer's Payroll Taxes and Preparing the Journal Entry to Record them Employer's Portion of Payroll Taxes:
Amount of earnings March 4 - 10 subject to unemployment taxes = $780 - 280 = $500
Gross pay: 48 hours * $15.00/hr. $720.00 8 hours * $7.50/hr. (15.00/0.5) $60.00 Total gross pay $780.00 Deductions: FIT Withholding $780 * 10% $78.00 FICA - Employee portion $780 * 8% $62.40 Health insurance premium $20.00 Total deductions ($160.40) Net Pay $619.60Related Questions
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