Ehrlich Co. began business on January 2. Salaries were paid toemployees on the last day of each month, and social security tax,Medicare tax, and federal income tax were withheld in the requiredamounts. An employee who is hired in the middle of the month receiveshalf the monthly salary for that month. All required payroll tax reports were filed, and the correct amount of payroll taxes was remitted by thecompany for the calendar year. Early in the following year, before theWage and Tax Statements (Form W-2) could be prepared for distributionto employees and for filing with the Social Security Administration, theemployees' 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 waswithheld at the rate of 6.0% and Medicare tax at the rate of 1.5% onsalary. Data on dates of employment, salary rates, and employees'income taxes withheld, which are summarized as follows, were obtainedfrom personnel records and payroll records: Employee Date First Employed Monthly Salary Monthly Income Tax Withheld ArnettCruzEdwardsHarvinNicksShiancoeWard Nov. 16Jan. 2Oct. 1Dec. 1Feb. 1Mar.1Nov. 16 $ 6,0004,600B.2005,9001200011,3004,700 $1,1327981,6321,05228202,533788 Instructions1. Compute the amounts to be reported for the year on eachemployee's Wage and Tax Statement (Form W-2), arranging the dataas follows. Round all amounts to the nearest cent. Employee----Gross Earnings----Federal Income tax withheld----Social Security tax withheld----Medicare Tax Withheld 2. Compute 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'searnings, (d) federal unemployment compensation at 0.8% on thefirst $10,000 of each employee's earnings, and (e) total. Round allamounts to the nearest cent.
Ehrlich Co. began business on January 2. 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 the following year, 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% on
salary. 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:
| Employee | Date First Employed | Monthly Salary | Monthly Income Tax Withheld |
| Arnett Cruz Edwards Harvin Nicks Shiancoe Ward |
Nov. 16 Jan. 2 Oct. 1 Dec. 1 Feb. 1 Mar.1 Nov. 16 |
$ 6,000 4,600 B.200 5,900 12000 11,300 4,700 |
$1,132 798 1,632 1,052 2820 2,533 788 |
Instructions
1. Compute the amounts to be reported for the year on each
employee's Wage and Tax Statement (Form W-2), arranging the data
as follows. Round all amounts to the nearest cent.
Employee----Gross Earnings----Federal Income tax withheld----Social Security tax withheld----Medicare Tax Withheld
2. Compute the following employer payroll taxes for the year: (a)
social security, (b) Medicare, (c) state
earnings, (d) federal unemployment compensation at 0.8% on the
first $10,000 of each employee's earnings, and (e) total. Round all
amounts to the nearest cent.
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