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Legend Company employs the following 4 employees: Cumulative Current Pension SS MC Earnings Pay John $122,000.00 $6,100.00 Paul 109,000.00 5,450.00 George 117,000.00 5,850.00 Ringo 118,500.00 5,925.00 FIT W/H Contribution тих Tax $826.60 4% 0 88.45 970.43 6% 337.90 79.025 764.10 2% 93 84.83 1,339.75 0% O 85.91 430.9 338.23 The Social Security tax rate is 6.2% and the Medicare rate is 1.45%, assume the social security wage base is $118,500. FUTAand SUTA are assessed on the first $7,000 of employee's earnings at a rate of .6% and 2% respectively. Additionally, each employee makes a retirement plan contribution as indicated above, Legend matches the first 4% of employee pension contributions dollar for dollar. Required: 1. Calculate each employee's net pay & prepare the journal entry to record the payroll accrual on Legend's books. 2. Calculate the employer's FICA, FUTA and SUTA tax obligations and the journal entry to record the payroll tax on Legend's books.

Legend Company employs the following 4 employees: Cumulative Current Pension SS MC Earnings Pay John $122,000.00 $6,100.00 Paul 109,000.00 5,450.00 George 117,000.00 5,850.00 Ringo 118,500.00 5,925.00 FIT W/H Contribution тих Tax $826.60 4% 0 88.45 970.43 6% 337.90 79.025 764.10 2% 93 84.83 1,339.75 0% O 85.91 430.9 338.23 The Social Security tax rate is 6.2% and the Medicare rate is 1.45%, assume the social security wage base is $118,500. FUTAand SUTA are assessed on the first $7,000 of employee's earnings at a rate of .6% and 2% respectively. Additionally, each employee makes a retirement plan contribution as indicated above, Legend matches the first 4% of employee pension contributions dollar for dollar. Required: 1. Calculate each employee's net pay & prepare the journal entry to record the payroll accrual on Legend's books. 2. Calculate the employer's FICA, FUTA and SUTA tax obligations and the journal entry to record the payroll tax on Legend's books.

FINANCIAL ACCOUNTING
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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Legend Company employs the following 4 employees: Cumulative Current Pension SS MC Earnings Pay John $122,000.00 $6,100.00 Paul 109,000.00 5,450.00 George 117,000.00 5,850.00 Ringo 118,500.00 5,925.00 FIT W/H Contribution тих Tax $826.60 4% 0 88.45 970.43 6% 337.90 79.025 764.10 2% 93 84.83 1,339.75 0% O 85.91 430.9 338.23 The Social Security tax rate is 6.2% and the Medicare rate is 1.45%, assume the social security wage base is $118,500. FUTAand SUTA are assessed on the first $7,000 of employee's earnings at a rate of .6% and 2% respectively. Additionally, each employee makes a retirement plan contribution as indicated above, Legend matches the first 4% of employee pension contributions dollar for dollar. Required: 1. Calculate each employee's net pay & prepare the journal entry to record the payroll accrual on Legend's books. 2. Calculate the employer's FICA, FUTA and SUTA tax obligations and the journal entry to record the payroll tax on Legend's books.
Transcribed Image Text:Legend Company employs the following 4 employees: Cumulative Current Pension SS MC Earnings Pay John $122,000.00 $6,100.00 Paul 109,000.00 5,450.00 George 117,000.00 5,850.00 Ringo 118,500.00 5,925.00 FIT W/H Contribution тих Tax $826.60 4% 0 88.45 970.43 6% 337.90 79.025 764.10 2% 93 84.83 1,339.75 0% O 85.91 430.9 338.23 The Social Security tax rate is 6.2% and the Medicare rate is 1.45%, assume the social security wage base is $118,500. FUTAand SUTA are assessed on the first $7,000 of employee's earnings at a rate of .6% and 2% respectively. Additionally, each employee makes a retirement plan contribution as indicated above, Legend matches the first 4% of employee pension contributions dollar for dollar. Required: 1. Calculate each employee's net pay & prepare the journal entry to record the payroll accrual on Legend's books. 2. Calculate the employer's FICA, FUTA and SUTA tax obligations and the journal entry to record the payroll tax on Legend's books.
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