Monthly Income Tax Date First Employed Monthly Salary $ 5,500 Employee Withheld Arnett Nov. 16 $ 944 Cruz Jan. 2 4,800 833 Edwards Oct 1 8,000 1,592 Harvin Dec. 1 6,000 1,070 Nicks Feb. 1 10,000 2,350 Shiancoe Mar. 1 11,600 2,600 Ward Nov. 16 5,220 876
Wage and tax statement data on employer FICA tax
Ehrlich Co. began business on January 2, 20Y8. 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 2019, 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 lax at the rate of 1.5%. 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:
Instructions
1. Calculate the amounts to be reported on each employee's Wage
and Tax Statement (Form W-2) for 20Y8, arranging the data in the
following form:
| Employee | Gross Earnings | Federal income tax withheld | Social Security Tax Withheld | Medicare Tax Withheld |
2. Calculate the following employer payroll taxes for the year: (a)
social security; (b) Medicare; (c) state
compensation at 5.4% on the first $10,000 of each employee's
earnings; (d) federal unemployment compensation at 0.6% on the
first $10,000 of each employee's earnings; (e) total.
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