Marlene Grady and Pauline Monroe are partners engaged in operating The G&M Doll Shop, which has employed the following persons since the beginning of the year: V. Hoffman (general office worker). A. Drugan (saleswoman). G. Beiter (stock clerk).. S. Egan (deliveryman).. B. Lin (cleaning and maintenance, part-time) $1,700 per month $15,000 per year $180 per week $220 per week $160 per week Grady and Monroe are each paid a weekly salary allowance of $950. The doll shop is located in a state that requires unemployment compensation contributions of employers of one or more individuals. The company is subject to state contributions at a rate of 3.1% for wages not in excess of $8,100. Compute cach of the following amounts based upon the 41st weekly payroll period for the week ending October 11: a. Amount of FICA taxes (OASDI and HI) to be withheld from the earnings of each person. (Refer to Chapter 3.) OASDI HI 2$ M. Grady P. Monroe.. V. Hoffman A. Drugan G. Beiter. S. Egan. В. Lin ......... b. Amount of the employer's FICA taxes for the weekly payroll. c. Amount of state unemployment contributions for the weekly payroll.. d. Amount of the net FUTA tax on the payroll. e. Total amount of the employer's payroll taxes for the weekly payroll.
Marlene Grady and Pauline Monroe are partners engaged in operating The G&M Doll Shop, which has employed the following persons since the beginning of the year: V. Hoffman (general office worker). A. Drugan (saleswoman). G. Beiter (stock clerk).. S. Egan (deliveryman).. B. Lin (cleaning and maintenance, part-time) $1,700 per month $15,000 per year $180 per week $220 per week $160 per week Grady and Monroe are each paid a weekly salary allowance of $950. The doll shop is located in a state that requires unemployment compensation contributions of employers of one or more individuals. The company is subject to state contributions at a rate of 3.1% for wages not in excess of $8,100. Compute cach of the following amounts based upon the 41st weekly payroll period for the week ending October 11: a. Amount of FICA taxes (OASDI and HI) to be withheld from the earnings of each person. (Refer to Chapter 3.) OASDI HI 2$ M. Grady P. Monroe.. V. Hoffman A. Drugan G. Beiter. S. Egan. В. Lin ......... b. Amount of the employer's FICA taxes for the weekly payroll. c. Amount of state unemployment contributions for the weekly payroll.. d. Amount of the net FUTA tax on the payroll. e. Total amount of the employer's payroll taxes for the weekly payroll.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:# Payroll Accounting: Computing Payroll Taxes
### Example Problem: G&M Doll Shop Payroll
**Scenario**:
Marlene Grady and Pauline Monroe are partners operating The G&M Doll Shop. They have employed the following personnel since the beginning of the year:
- **V. Hoffman** (general office worker): $1,700 per month
- **A. Drugan** (saleswoman): $15,000 per year
- **G. Beiter** (stock clerk): $180 per week
- **S. Egan** (deliveryman): $220 per week
- **B. Lin** (cleaning and maintenance, part-time): $160 per week
Grady and Monroe each receive a weekly salary allowance of $950.
The doll shop is located in a state that mandates unemployment compensation contributions from employers of 1% or more individuals. The company is subject to state contributions at a rate of 3.1% for wages not in excess of $8,100.
### Tasks:
Based on the 41st weekly payroll period for the week ending October 11, compute the following amounts:
1. **FICA Taxes** (OASDI and HI) to be withheld from the earnings of each person.
2. **Employer’s FICA Taxes** for the weekly payroll.
3. **State Unemployment Contributions** for the weekly payroll.
4. **Net FUTA Tax** on the payroll.
5. **Total Employer’s Payroll Taxes** for the weekly payroll.
### Worksheet:
**OASDI (Old-Age, Survivors, and Disability Insurance) and HI (Hospital Insurance) Contributions**:
| Employee | OASDI ($) | HI ($) |
|----------------|-----------|--------|
| M. Grady | | |
| P. Monroe | | |
| V. Hoffman | | |
| A. Drugan | | |
| G. Beiter | | |
| S. Egan | | |
| B. Lin | | |
### Additional Details:
- **Employer's Contributions**:
- FICA Taxes for the weekly payroll: __________
- State Unemployment Contributions: __________
- Net FUTA Tax on the payroll: __________
- Total Employer’s Payroll Taxes: __________
### Analysis:
**Step-by-Step Guide**:
1. **Calculate the weekly earnings
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