Example 4-9 From the above example, if you indicate separately on Robinson’s paycheck stub the amount of each payment, the amount of federal income tax to be withheld is computed as follows: Taxes Withheld Regular monthly earnings $2,400 $ 37.00 (from wage-bracket tax tables*) Quarterly bonus 4,600 1,012.00 ($4,600 × 22%) Totals $7,000 $ 1,049.00 The calculation of Robinson’s federal income tax for the quarter would be computed as follows: Taxes Withheld Regular monthly earnings $2,400 $37.00 × 3 months = $ 111.00 (from wage-bracket tables*) Quarterly bonus 4,600 1,012.00 ($4,600 × 22%) $1,123.00 *The percentage table could also be used. Note: OASDI and HI withholdings are calculated on total earnings per pay period multiplied by number of pay periods and then added together to arrive at a quarter’s total withholding. Quarterly and year-to-date information would appear on Robinson’s employee earnings record. The names of the employees of Cox Security Systems and their regular salaries are shown in the following payroll register. Note that Hall and Short are paid monthly on the last payday, while all others are paid weekly. In addition to the regular salaries, the company pays an annual bonus based on the amount of earnings for the year. For the current year, the bonus amounts to 8% of the annual salary paid to each employee. The bonus is to be paid along with the regular salaries on December 27, 20--, but the amount of the bonus and the amount of the regular salary will be shown separately on each employee's earnings statement. Assume that all employees received their regular salary during the entire year. Prepare the payroll for the pay period ending December 27, 20--, showing the following for each employee: Use the wage-bracket method to withhold federal income tax from the regular salaries. Withhold a flat 22% on the annual bonus. Total salaries and bonuses are subject to a 2% state income tax and a 1% city income tax. Enter all amounts as positive numbers. And round all values to the nearest cent. Click here to access the Wage-Bracket Method Tables. For Period Ending December 27, 20-- Employee Name No. of Earnings Deductions Marital W/H (a) (b) (c) FICA (d) (e) (f) (g) Status Allowances Regular Supp'l Total OASDI HI FIT SIT CIT Net Pay Hall, Michael M 5 $3,500.00* $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 $fill in the blank 5 $fill in the blank 6 $fill in the blank 7 $fill in the blank 8 Short, Joy T. M 2 2,750.00* fill in the blank 9 fill in the blank 10 fill in the blank 11 fill in the blank 12 fill in the blank 13 fill in the blank 14 fill in the blank 15 fill in the blank 16 Abbott, Linda S 1 520.00 fill in the blank 17 fill in the blank 18 fill in the blank 19 fill in the blank 20 fill in the blank 21 fill in the blank 22 fill in the blank 23 fill in the blank 24 Smith, Joseph M 4 465.00 fill in the blank 25 fill in the blank 26 fill in the blank 27 fill in the blank 28 fill in the blank 29 fill in the blank 30 fill in the blank 31 fill in the blank 32 Tols, Sean M. M 2 380.00 fill in the blank 33 fill in the blank 34 fill in the blank 35 fill in the blank 36 fill in the blank 37 fill in the blank 38 fill in the blank 39 fill in the blank 40 Gillespie, Michelle S 1 350.00 fill in the blank 41 fill in the blank 42 fill in the blank 43 fill in the blank 44 fill in the blank 45 fill in the blank 46 fill in the blank 47 fill in the blank 48 Smart, Jennifer M 2 575.00 fill in the blank 49 fill in the blank 50 fill in the blank 51 fill in the blank 52 fill in the blank 53 fill in the blank 54 fill in the blank 55 fill in the blank 56 White, Matthew J. S 0 425.00 fill in the blank 57 fill in the blank 58 fill in the blank 59 fill in the blank 60 fill in the blank 61 fill in the blank 62 fill in the blank 63 fill in the blank 64 Totals $fill in the blank 65 $fill in the blank 66 $fill in the blank 67 $fill in the blank 68 $fill in the blank 69 $fill in the blank 70 $fill in the blank 71 $fill in the blank 72 $fill in the blank 73 *Monthly Compute the employer's FICA taxes for the pay period ending December 27, 20--. OASDI Taxes HI Taxes OASDI taxable earnings $fill in the blank 74 HI taxable earnings $fill in the blank 75 OASDI taxes $fill in the blank 76 HI taxes $fill in the blank 77

Example 4-9 From the above example, if you indicate separately on Robinson’s paycheck stub the amount of each payment, the amount of federal income tax to be withheld is computed as follows: Taxes Withheld Regular monthly earnings $2,400 $ 37.00 (from wage-bracket tax tables) Quarterly bonus 4,600 1,012.00 ($4,600 × 22%) Totals $7,000 $ 1,049.00 The calculation of Robinson’s federal income tax for the quarter would be computed as follows: Taxes Withheld Regular monthly earnings $2,400 $37.00 × 3 months = $ 111.00 (from wage-bracket tables) Quarterly bonus 4,600 1,012.00 ($4,600 × 22%) $1,123.00 The percentage table could also be used. Note: OASDI and HI withholdings are calculated on total earnings per pay period multiplied by number of pay periods and then added together to arrive at a quarter’s total withholding. Quarterly and year-to-date information would appear on Robinson’s employee earnings record. The names of the employees of Cox Security Systems and their regular salaries are shown in the following payroll register. Note that Hall and Short are paid monthly on the last payday, while all others are paid weekly. In addition to the regular salaries, the company pays an annual bonus based on the amount of earnings for the year. For the current year, the bonus amounts to 8% of the annual salary paid to each employee. The bonus is to be paid along with the regular salaries on December 27, 20--, but the amount of the bonus and the amount of the regular salary will be shown separately on each employee's earnings statement. Assume that all employees received their regular salary during the entire year. Prepare the payroll for the pay period ending December 27, 20--, showing the following for each employee: Use the wage-bracket method to withhold federal income tax from the regular salaries. Withhold a flat 22% on the annual bonus. Total salaries and bonuses are subject to a 2% state income tax and a 1% city income tax. Enter all amounts as positive numbers. And round all values to the nearest cent. Click here to access the Wage-Bracket Method Tables. For Period Ending December 27, 20-- Employee Name No. of Earnings Deductions Marital W/H (a) (b) (c) FICA (d) (e) (f) (g) Status Allowances Regular Supp'l Total OASDI HI FIT SIT CIT Net Pay Hall, Michael M 5 $3,500.00 $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 $fill in the blank 5 $fill in the blank 6 $fill in the blank 7 $fill in the blank 8 Short, Joy T. M 2 2,750.00* fill in the blank 9 fill in the blank 10 fill in the blank 11 fill in the blank 12 fill in the blank 13 fill in the blank 14 fill in the blank 15 fill in the blank 16 Abbott, Linda S 1 520.00 fill in the blank 17 fill in the blank 18 fill in the blank 19 fill in the blank 20 fill in the blank 21 fill in the blank 22 fill in the blank 23 fill in the blank 24 Smith, Joseph M 4 465.00 fill in the blank 25 fill in the blank 26 fill in the blank 27 fill in the blank 28 fill in the blank 29 fill in the blank 30 fill in the blank 31 fill in the blank 32 Tols, Sean M. M 2 380.00 fill in the blank 33 fill in the blank 34 fill in the blank 35 fill in the blank 36 fill in the blank 37 fill in the blank 38 fill in the blank 39 fill in the blank 40 Gillespie, Michelle S 1 350.00 fill in the blank 41 fill in the blank 42 fill in the blank 43 fill in the blank 44 fill in the blank 45 fill in the blank 46 fill in the blank 47 fill in the blank 48 Smart, Jennifer M 2 575.00 fill in the blank 49 fill in the blank 50 fill in the blank 51 fill in the blank 52 fill in the blank 53 fill in the blank 54 fill in the blank 55 fill in the blank 56 White, Matthew J. S 0 425.00 fill in the blank 57 fill in the blank 58 fill in the blank 59 fill in the blank 60 fill in the blank 61 fill in the blank 62 fill in the blank 63 fill in the blank 64 Totals $fill in the blank 65 $fill in the blank 66 $fill in the blank 67 $fill in the blank 68 $fill in the blank 69 $fill in the blank 70 $fill in the blank 71 $fill in the blank 72 $fill in the blank 73 *Monthly Compute the employer's FICA taxes for the pay period ending December 27, 20--. OASDI Taxes HI Taxes OASDI taxable earnings $fill in the blank 74 HI taxable earnings $fill in the blank 75 OASDI taxes $fill in the blank 76 HI taxes $fill in the blank 77

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Example 4-9

From the above example, if you indicate separately on Robinson’s paycheck stub the amount of each payment, the amount of federal income tax to be withheld is computed as follows:

		Taxes Withheld
Regular monthly earnings	$2,400	$ 37.00	(from wage-bracket tax tables*)
Quarterly bonus	4,600	1,012.00	($4,600 × 22%)
Totals	$7,000	$ 1,049.00

The calculation of Robinson’s federal income tax for the quarter would be computed as follows:

		Taxes Withheld
Regular monthly earnings	$2,400	$37.00 × 3 months =	$ 111.00	(from wage-bracket tables*)
Quarterly bonus	4,600		1,012.00	($4,600 × 22%)
			$1,123.00

*The percentage table could also be used.

Note: OASDI and HI withholdings are calculated on total earnings per pay period multiplied by number of pay periods and then added together to arrive at a quarter’s total withholding. Quarterly and year-to-date information would appear on Robinson’s employee earnings record.

The names of the employees of Cox Security Systems and their regular salaries are shown in the following payroll register. Note that Hall and Short are paid monthly on the last payday, while all others are paid weekly.

In addition to the regular salaries, the company pays an annual bonus based on the amount of earnings for the year. For the current year, the bonus amounts to 8% of the annual salary paid to each employee. The bonus is to be paid along with the regular salaries on December 27, 20--, but the amount of the bonus and the amount of the regular salary will be shown separately on each employee's earnings statement. Assume that all employees received their regular salary during the entire year.

Prepare the payroll for the pay period ending December 27, 20--, showing the following for each employee:

Use the wage-bracket method to withhold federal income tax from the regular salaries.
Withhold a flat 22% on the annual bonus.
Total salaries and bonuses are subject to a 2% state income tax and a 1% city income tax.

Enter all amounts as positive numbers. And round all values to the nearest cent.

Click here to access the Wage-Bracket Method Tables.

For Period Ending December 27, 20--

Employee Name		No. of	Earnings	Deductions
Marital	W/H		(a)	(b)	(c) FICA	(d)	(e)	(f)	(g)
Status	Allowances	Regular	Supp'l	Total	OASDI	HI	FIT	SIT	CIT	Net Pay
Hall, Michael	M	5	$3,500.00*	$fill in the blank 1	$fill in the blank 2	$fill in the blank 3	$fill in the blank 4	$fill in the blank 5	$fill in the blank 6	$fill in the blank 7	$fill in the blank 8
Short, Joy T.	M	2	2,750.00*	fill in the blank 9	fill in the blank 10	fill in the blank 11	fill in the blank 12	fill in the blank 13	fill in the blank 14	fill in the blank 15	fill in the blank 16
Abbott, Linda	S	1	520.00	fill in the blank 17	fill in the blank 18	fill in the blank 19	fill in the blank 20	fill in the blank 21	fill in the blank 22	fill in the blank 23	fill in the blank 24
Smith, Joseph	M	4	465.00	fill in the blank 25	fill in the blank 26	fill in the blank 27	fill in the blank 28	fill in the blank 29	fill in the blank 30	fill in the blank 31	fill in the blank 32
Tols, Sean M.	M	2	380.00	fill in the blank 33	fill in the blank 34	fill in the blank 35	fill in the blank 36	fill in the blank 37	fill in the blank 38	fill in the blank 39	fill in the blank 40
Gillespie, Michelle	S	1	350.00	fill in the blank 41	fill in the blank 42	fill in the blank 43	fill in the blank 44	fill in the blank 45	fill in the blank 46	fill in the blank 47	fill in the blank 48
Smart, Jennifer	M	2	575.00	fill in the blank 49	fill in the blank 50	fill in the blank 51	fill in the blank 52	fill in the blank 53	fill in the blank 54	fill in the blank 55	fill in the blank 56
White, Matthew J.	S	0	425.00	fill in the blank 57	fill in the blank 58	fill in the blank 59	fill in the blank 60	fill in the blank 61	fill in the blank 62	fill in the blank 63	fill in the blank 64
Totals			$fill in the blank 65	$fill in the blank 66	$fill in the blank 67	$fill in the blank 68	$fill in the blank 69	$fill in the blank 70	$fill in the blank 71	$fill in the blank 72	$fill in the blank 73

*Monthly

Compute the employer's FICA taxes for the pay period ending December 27, 20--.

OASDI Taxes		HI Taxes
OASDI taxable earnings	$fill in the blank 74	HI taxable earnings	$fill in the blank 75
OASDI taxes	$fill in the blank 76	HI taxes	$fill in the blank 77

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