Payroll Exam 6
Journalize each of the payroll transactions listed below. Post all entries except the last two to the appropriate general ledger accounts. The journal page and the ledger accounts are supplied below. The balances listed in the general ledger accounts for Cash, FUTA Taxes Payable, SUTA Taxes Payable, Employees SIT Payable, Wages and Salaries, and Payroll Taxes are the results of all payroll transactions for the first quarter, not including the last pay of the quarter. The balances in FICA Taxes Payable—OASDI, FICA Taxes Payable—HI, and Employees FIT Payable are the amounts due from the March 15 payroll. December 31, 20--: The company has determined that employees have earned $19,300 in unused vacation time. Record the adjusting entry to put this expense on the books. Do not post this entry.
Dec-31 Vaca ben exp $19,300 Vaca ben pay $19,300
Disposable earnings are the earnings remaining after withholding only federal income taxes.
False
In all computerized payroll systems, there is still the need to manually post from the printed payroll journal entry to the general ledger.
False
In the case of a federal tax levy, the employee will notify the employer of the amount to take out of his or her paycheck.
False
The payment of the FUTA tax and the FICA taxes by the employer to the IRS is recorded in the same journal entry.
False
The payroll register is used by employers in completing Forms W-2.
False
When recording the employer's payroll taxes, a liability account entitled Employers Payroll Taxes Payable is credited for the total taxes owed (FICA, FUTA, and SUTA).
False
Journalize each of the payroll transactions listed below. Post all entries except the last two to the appropriate general ledger accounts. The journal page and the ledger accounts are supplied below. The balances listed in the general ledger accounts for Cash, FUTA Taxes Payable, SUTA Taxes Payable, Employees SIT Payable, Wages and Salaries, and Payroll Taxes are the results of all payroll transactions for the first quarter, not including the last pay of the quarter. The balances in FICA Taxes Payable—OASDI, FICA Taxes Payable—HI, and Employees FIT Payable are the amounts due from the March 15 payroll. March 31, 20--: Paid total wages of $9,350.00. These are the wages for the last semimonthly pay of March. All of this amount is taxable under FICA (OASDI and HI). In addition, withhold $1,175 for federal income taxes and $102.03 for state income taxes. These are the only deductions made from the employees' wages.
Mar-31 Wages & salar $9,350 OASDI pay $579.70 HI Pay $135.58 FIT pay $1,175.00 SIT pay. $102.03 Cash $7,357.69
FICA Taxes Payable—HI is a liability account in which is recorded the liability of the employer for the HI tax on the employer as well as for the HI tax withheld from employees' wages.
True
The employer keeps track of each employee's accumulated wages in the employee's earnings record.
True
The information needed in preparing a journal entry to record the wages earned, deductions from wages, and net amount paid each payday is obtained from the payroll register.
True
Roofling Company paid wages of $319,600 this year. Of this amount, $193,900 was taxable for net FUTA and SUTA purposes. The state's contribution tax rate is 4.3% for Roofling Company. Due to cash flow problems, the company did not make any SUTA payments until after the Form 940 filing date. Compute the following; round your answers to the nearest cent. a. Amount of credit the company would receive against the FUTA tax for its SUTA contributions $ b. Amount that Roofling Company would pay to the federal government for its FUTA tax $ c. Amount that the company lost because of its late payments
a. 9,636.83 ($193,900 * 4.3% * 90%)=7,503.93 $193,900 * (5.4% - 4.3%) =$2,132.90 $7,503.93 + $2,132.90 = $9,636.83 Credit for SUTA contributions = 90% credit for state taxes paid late + Additional tax credit if rate were 5.4% b.1,997.17 $193,900 * 0.06 = $11,634 Gross FUTA tax $11,634 - $9,636.83 = $1,997.17 Gross FUTA tax - Credit for SUTA contributions =Net FUTA tax payable c.833.77 $193,900 * 4.3% * 10% = $833.77 Had the company paid its states taxes on time, it would have full credit instead of 90%.Hence it has lost 10% of its credit for state taxes. Loss to the company because of late payments
In calculating overtime premium earnings at one and a half times the regular hourly rate, the overtime hours are multiplied by one-half the hourly rate of pay.
True
In the garnishment process, federal tax levies take secondary priority to wages withheld for child support orders.
True
On December 31, 20--, Sanchez Company needed to record its accrued wages for year-end. If December 31 is a Wednesday, then Sanchez Company must account for three days of wages. The company operates on a five-day workweek, the prior week's gross pay was $29,870, and the net pay was $19,995.
Wage Exp 17922 (Ignore net pay 29870/5 days=5974 5974*3 days) Wages Pay 17922
The totals from the first payroll of the year are shown below. TotalEarnings $36,195.10 FICA OASDI $2,244.10 FICA HI $524.83 FIT W/H $6,515.00 StateTax 361.95 UnionDues $500.00 NetPay $26,049.22 Journalize the entry to record the payroll.
Wages Exp 36195.10 OASDI pay 2244.10 HI Pay. 524.83 FIT Pay. 6515 SIT Pay. 361.95 Union Pay. 500 Cash 26049.22
The totals from the first payroll of the year are shown below. TotalEarnings $36,195.10 FICA OASDI $2,244.10 FICA HI $524.83 FIT W/H $6,515.00 StateTax 361.95 UnionDues $500.00 NetPay $26,049.22 Journalize the adjustment for accrued wages for the following Monday, which is the end of the accounting period. The gross payroll for that day is $7,475.
Wages Expense 7475 (listed) Wages Pay 7475 (listed)
At the end of June, Morton Company had a balance of $49,900 in the vacation benefits payable account. During July, employees earned an additional $3,110 in vacation benefits, but some employees used vacation days that amounted to $2,490 of the vacation benefits. The $2,490 was charged to Wages Expense when it was paid in July. What adjusting entry would Morton Company make at the end of July to bring the vacation benefits payable account up to date?
3110-2490=620 vaca exp 620 vaca pay 620
Journalize each of the payroll transactions listed below. Post all entries except the last two to the appropriate general ledger accounts. The journal page and the ledger accounts are supplied below. The balances listed in the general ledger accounts for Cash, FUTA Taxes Payable, SUTA Taxes Payable, Employees SIT Payable, Wages and Salaries, and Payroll Taxes are the results of all payroll transactions for the first quarter, not including the last pay of the quarter. The balances in FICA Taxes Payable—OASDI, FICA Taxes Payable—HI, and Employees FIT Payable are the amounts due from the March 15 payroll. April 15, 20--: Made a deposit to remove the liability for the FICA taxes and the employees' federal income taxes withheld on the two March payrolls.
Apr-15 OASDI Pay $2287.80 HI Pay. $535.06 FIT pay $2,305.00 Cash $5127.86
Journalize each of the payroll transactions listed below. Post all entries except the last two to the appropriate general ledger accounts. The journal page and the ledger accounts are supplied below. The balances listed in the general ledger accounts for Cash, FUTA Taxes Payable, SUTA Taxes Payable, Employees SIT Payable, Wages and Salaries, and Payroll Taxes are the results of all payroll transactions for the first quarter, not including the last pay of the quarter. The balances in FICA Taxes Payable—OASDI, FICA Taxes Payable—HI, and Employees FIT Payable are the amounts due from the March 15 payroll. December 31, 20--: In July 20--, the company changed from a semimonthly pay system to a weekly pay system. The employees were paid every Friday through the rest of 20--. Record the adjusting entry for wages accrued at the end of December ($770) but not paid until the first Friday in January. Do not post this entry.
Dec-31 Wages/ sal Pay 770.00 Wages/sals Pay 770.00
The partnership of Cox and Cohen paid the following wages during this year: M. Cox (partner) 45,000 S. Cohen (partner) 26,000 N. Tate (supervisor) 14,350 T. Gerenski (factory worker) 9,900 R. Sobowski (factory worker) 9,450 D. Brunder (factory worker) 8,910 S. Carsoni (bookkeeper) 11,100 C. Chu (maintenance) 3,900 In addition, the partnership owed $200 to Chu for work he performed during December. However, payment for this work will not be made until January of the following year. The state unemployment tax rate for the company is 2.95% on the first $9,000 of each employee's earnings. Compute:
M. Cox -Partners not included S.Cohen-Partners not included N. Tate 14,350-7000=7350 T. Gerenski 9,900-7000=2900 R. Sobowski 9,450-7000=2450 D. Brunder 8,910-7000=1910 S. Carsoni 11,100-7000=4100 C. Chu 3,900-7000=0 Total Salary = 57610 minus excess =18710 Taxable FUTA= 38900 38900*.006=233.40 M. Cox -Partners not included S.Cohen-Partners not included N. Tate 14,350-9000=5350 T. Gerenski 9,900-9000=900 R. Sobowski 9,450-9000=450 D. Brunder 8,910-9000=0 S. Carsoni 11,100-000=2100 C. Chu 3,900-9000=0 Total Salary = 57610 minus excess =8800 TaxableSUTA= 48810 48810*.0295=1439.90
Journalize each of the payroll transactions listed below. Post all entries except the last two to the appropriate general ledger accounts. The journal page and the ledger accounts are supplied below. The balances listed in the general ledger accounts for Cash, FUTA Taxes Payable, SUTA Taxes Payable, Employees SIT Payable, Wages and Salaries, and Payroll Taxes are the results of all payroll transactions for the first quarter, not including the last pay of the quarter. The balances in FICA Taxes Payable—OASDI, FICA Taxes Payable—HI, and Employees FIT Payable are the amounts due from the March 15 payroll. March 31, 20--: Record the employer's payroll taxes for the last pay in March. All of the earnings are taxable under FICA (OASDI and HI), FUTA (0.6%), and SUTA (2.8%).
Mar-31 Payrll tax $1,033.18 OASDI pay $579.70 HI Pay $135.58 FUTA pay $56.10 SUTA pay $261.80
Journalize each of the payroll transactions listed below. Post all entries except the last two to the appropriate general ledger accounts. The journal page and the ledger accounts are supplied below. The balances listed in the general ledger accounts for Cash, FUTA Taxes Payable, SUTA Taxes Payable, Employees SIT Payable, Wages and Salaries, and Payroll Taxes are the results of all payroll transactions for the first quarter, not including the last pay of the quarter. The balances in FICA Taxes Payable—OASDI, FICA Taxes Payable—HI, and Employees FIT Payable are the amounts due from the March 15 payroll. May 2, 20--: Filed the state income tax return for the first quarter of 20-- and paid the total amount owed for the quarter to the state income tax bureau.
May-02 Emp SIT pay $580.74 Cash $580.74
Journalize each of the payroll transactions listed below. Post all entries except the last two to the appropriate general ledger accounts. The journal page and the ledger accounts are supplied below. The balances listed in the general ledger accounts for Cash, FUTA Taxes Payable, SUTA Taxes Payable, Employees SIT Payable, Wages and Salaries, and Payroll Taxes are the results of all payroll transactions for the first quarter, not including the last pay of the quarter. The balances in FICA Taxes Payable—OASDI, FICA Taxes Payable—HI, and Employees FIT Payable are the amounts due from the March 15 payroll. May 2, 20--: Made the deposit to remove the liability for FUTA taxes for the first quarter of 20--.
May-02 FUTA pay $317.22 Cash $317.22
Journalize each of the payroll transactions listed below. Post all entries except the last two to the appropriate general ledger accounts. The journal page and the ledger accounts are supplied below. The balances listed in the general ledger accounts for Cash, FUTA Taxes Payable, SUTA Taxes Payable, Employees SIT Payable, Wages and Salaries, and Payroll Taxes are the results of all payroll transactions for the first quarter, not including the last pay of the quarter. The balances in FICA Taxes Payable—OASDI, FICA Taxes Payable—HI, and Employees FIT Payable are the amounts due from the March 15 payroll. May 2, 20--: Filed the state unemployment contributions return for the first quarter of 20-- and paid the total amount owed for the quarter to the state unemployment compensation fund.
May-02 SUTA pay $1,480.34 Cash $1,480.34
The totals from the first payroll of the year are shown below. TotalEarnings $36,195.10 FICA OASDI $2,244.10 FICA HI $524.83 FIT W/H $6,515.00 StateTax 361.95 UnionDues $500.00 NetPay $26,049.22 Journalize the entry to deposit the FICA and FIT taxes.
OASDI 4488.20 (2244.10*2) HI 1049.66 (524.83*2) Emp FIT Pay 6515 (listed) Cash 12052.86 (add up taxes to get cash)
The employees of Portonegra Company earn wages of $15,600 for the two weeks ending April 12. FIT taxes of $424 were withheld. The entire amount of wages is subject to the FICA taxes, but only $10,800 is taxable under the federal and state unemployment compensation laws. The state contribution rate of the employer is 3.9%. All employees are subject to state unemployment contributions of 0.5% on the April 12 taxable wages of $10,800, and the employees' contributions are to be deducted by the employer.
Payment Wages: Wage Exp 15600 (listed) OASDI pay 967.20 (15600*.062) HI Pay. 226.20 (15600*.0145) Fit Pay. 424.00 (listed) SUTA Pay. 54.00 (10800*.005) Cash. 13928.60 (15600-967.20-226.20-424-54) Payroll Taxes: Pay taxes 1679.40 (Do Taxes First then add up) OASDI pay 967.20 (15600*.062) HI Pay. 226.20 (15600*.0145) FUTA Pay. 64.80 (10800*.006) SUTA Pay. 421.20 (10800*.039)
The following information pertains to a weekly payroll of Fanelli Fashion Company: a. The total wages earned by employees are $2,910.b. The state unemployment insurance contribution rate is 3.75%.c. The entire amount of wages is taxable under FICA, FUTA, and SUTA.d. The amount withheld from the employees' wages for federal income taxes is $491; for state income taxes, $49.10; and for group insurance, $87.10.
Payment Wages: Wage Exp 2910 (listed) OASDI pay 180.42 (2910*.062) HI Pay. 42.20 (12910*.0145) Fit Pay. 491.00 (listed) SIT Pay. 49.10 (Listed) Group ins Prem 87.10 (Listed) Cash. 2060.18 Payroll Taxes: Pay taxes 349.21 (Do Taxes First then add up) OASDI pay 180.42 (2910*.062) HI Pay. 42.20 (2910*.0145) FUTA Pay. 17.46 (2910*.006) SUTA Pay. 109.13 (2910*.0375)
The totals from the first payroll of the year are shown below. TotalEarnings $36,195.10 FICA OASDI $2,244.10 FICA HI $524.83 FIT W/H $6,515.00 StateTax 361.95 UnionDues $500.00 NetPay $26,049.22 Journalize the entry to record the employer's payroll taxes (assume a SUTA rate of 3.7%).
Payroll Taxes 4325.32 (Figure out FUTA and suta then add to get payrl txs) OASDI pay 2244.10 (listed) HI taxes pay 524.83 (listed) FUTA pay 217.17 (36195.10*.006) SUTA pay 1339.22 (36195.10*.037)
Jake Gore worked for two different employers. Until May, he worked for Wonderman Construction Company in Kansas City, Kansas, and earned $21,500. The state unemployment rate for Wonderman is 4.6%. He then changed jobs and worked for Buxmont Improvement Company in Mobile, Alabama, and earned $33,100 for the rest of the year. The state unemployment rate for Buxmont is 5.1%. Determine the unemployment taxes (FUTA and SUTA) that would be paid by each company.
a) wonderman construction in Kansas 14000*4.6%$ 644 (14000 is from figure 5.1) 7000*.6% 42 Total$686 b) Buxmont Improvement Alabama 8000*5.1% 408 ( 8000 is from figure 5.1) 7000*.6% 42 Total$450
The following unemployment tax rate schedule is in effect for the calendar year 2020 in State A, which uses the reserve-ratio formula in determining employer contributions: Reserve RatioContribution Rate0.0% or more, but less than 1.0%. 6.7% 1.0% or more, but less than 1.2%. 6.4% 1.2% or more, but less than 1.4%. 6.1% 1.4% or more, but less than 1.6%. 5.8% 1.6% or more, but less than 1.8%. 5.5% 1.8% or more, but less than 2.0%. 5.2% 2.0% or more, but less than 2.2%. 4.9% 2.2% or more, but less than 2.4%. 4.6% 2.4% or more, but less than 2.6%. 4.3% 2.6% or more, but less than 2.8%. 4.0% 2.8% or more, but less than 3.0%. 3.7% 3.0% or more, but less than 3.2%. 3.4% 3.2% or more 3.1% Conrad Company, which is located in State A, had an average annual payroll of $1,150,000 for the three 12-month periods ending on June 30, 2019 (the computation date for the tax year 2020). As of June 30, 2019, the total contributions that had been made to Conrad Company's reserve account, in excess of the benefits charged, amounted to $21,560. Compute the following: a. Conrad Company's reserve ratio for 2019. b. 2020 contribution rate for the company. c. Smallest contribution that the company can make in order to reduce its tax rate if State A permits voluntary contributions. d. Tax savings realized by the company, taking into consideration the voluntary contribution made in (c) if the taxable payroll in 2020 is $1,295,000.$
a. 1.87% (21560/1150000= 1.87%) b. 5.2% (listed under 1.8%) c. 1440 (1150000*.02(listed)=23000 23000-21560=1440) d. $2445 (1295000*5.2%=67340 1295000*4.9%= 63455 67340-63455=3885 3885-1440= 2445
In Oregon, employers who are covered by the state workers' compensation law withhold employee contributions from the wages of covered employees for the workers' benefit fund at the rate of 1.2¢ for each hour or part of an hour that the worker is employed. Every covered employer is also assessed 1.2¢ per hour for each worker employed for each hour or part of an hour. The employer-employee contributions for workers' compensation are collected monthly, quarterly, or annually by the employer's insurance carrier, according to a schedule agreed upon by the employer and the carrier. The insurance carrier remits the contributions to the state's Workers' Compensation Department. Umber Company, a covered employer in Oregon, turns over the employer-employee workers' compensation contributions to its insurance carrier by the 15th of each month for the preceding month. During the month of July, the number of full-time employee-hours worked by the company's employees was 26,110; the number of part-time employee-hours was 3,490. a. The amount the company should have withheld from its full- and part-time employees during the month of July for workers' compensation insurance is: b. The title you would give to the general ledger account to which the amount withheld from the employees' earnings would be credited is: c. Journalize the entry on July 31 to record the employer's liability for workers' compensation insurance for the month. d. Journalize the entry on August 15 to record payment to the insurance carrier of the amount withheld from the employees' earnings for workers' compensation insurance and the amount of the employer's liability.
a. 355.20 (Full 26110*.012=313.32 Part 3490*.012=41.88 313.32+41.88=355.20) b. Workers comp ins Payable c. Work comp exp 355.20 Work comp Pay 355.20 d. ( remember its august so two payments) Work Comp Coll 355.20 WorkComp Pay 355.20 Cash 710.40
John Torre is the only employee of Bambert Company. His pay rate is $19.70 per hour with an overtime rate of 1½ times for hours over 40 in a workweek. For the week ending March 31, 20--, he worked 44 hours. Calculate his gross pay for the week using the overtime premium approach to calculate the overtime pay.
a. Regular pay 866.80 (19.70*44) Overtime premium 39.40 (9.85*4) Gross pay 906.20 (add) Salary Expense 906.20 Salaries Payable 906.20
In September, Painter Wax Corporation began operations in a state that requires new employers of one or more individuals to pay a state unemployment tax of 4.1% of the first $7,000 of wages paid each employee. An analysis of the company's payroll for the year shows total wages paid of $212,640. The salaries of the president and the vice president of the company were $25,000 and $15,000, respectively, for the four-month period, but there were no other employees who received wages in excess of $7,000 for the four months. Included in the total wages were $900 paid to a director who only attended director meetings during the year, $6,300 paid to the factory superintendent, and $2,000 in employee contributions to a cafeteria plan made on a pretax basis-for both federal and state. In addition to the total wages of $212,640, a payment of $2,000 was made to Andersen Accounting Company for an audit it performed on the company's books in December. Compute the following; round your answers to the nearest cent.
president. 25000-7000= 18000 excluded VP 15000-7000= 8000 excluded director= 900 excluded superintendent included cafeteria plan 2000 excluded 212640-18000-8000-900-2000=183740 FUTA/SUTA Taxable FUTA 183740*.006= 1102.44 SUTA 183740*.041= 7533.34