COLLEGE ACCOUNTING LOOSE-LEAF + CONNECT
COLLEGE ACCOUNTING LOOSE-LEAF + CONNECT
16th Edition
ISBN: 9781265167943
Author: Haddock
Publisher: MCG
Question
Book Icon
Chapter 10, Problem 3PA

1 to 7.

To determine

Prepare payroll register for Company M from the information given.

1 to 7.

Expert Solution
Check Mark

Explanation of Solution

Payroll: The total payment that a company is required to pay to its employee for the services received is called as payroll.

Payroll withholding deduction: The amounts which the employer withheld from employees’ gross pay to deduct taxes such as federal income tax, state income tax, social security tax, and Medicare tax are called payroll withholding deduction.

Payroll register: A schedule which is maintained by the company to record the earnings, earnings withholdings, and net pay of each employee is referred to as payroll register.

The purpose of payroll register is used to record the following:

  • Earnings of each employee.
  • Taxes (Social security tax, Medicare tax, and federal income tax) and other withholdings (health insurance, and other) of each employee.
  • Net pay of each employee.

Prepare payroll register for Company M as below:

COLLEGE ACCOUNTING LOOSE-LEAF + CONNECT, Chapter 10, Problem 3PA

Table (1)

Working notes:

Calculate regular time earnings for Ms. GB.

Regular time earnings for Ms. GB = Regular hours worked ×Hourly wage rate=40 hours ×$16.70 per hour=$668.00

Calculate regular time earnings for Mr. AG.

Regular time earnings for Mr. AG = Regular hours worked ×Hourly wage rate=40 hours ×$28.50 per hour=$1,140.00

Calculate regular time earnings for Mr. RP.

Regular time earnings for Mr. RP = Regular hours worked ×Hourly wage rate=40 hours ×$26.90 per hour=$1,076.00

Calculate regular time earnings for Ms. SR.

Regular time earnings for Ms. SR = Regular hours worked ×Hourly wage rate=40 hours ×$13.70 per hour=$548.00

Calculate overtime earnings for Ms. GB.

Overtime earnings for Ms. GB = Overtime hours worked ×Overtime wage rate=(47 hours– 40 hours)×($16.70×1.5)= 7 hours×$25.05 per hour= $175.35

Calculate overtime earnings for Mr. AG.

Overtime earnings for Mr. AG = Overtime hours worked ×Overtime wage rate=(43 hours– 40 hours)×($28.50×1.5)= 3 hours×$42.75 per hour= $128.25

Calculate overtime earnings for Mr. RP.

Overtime earnings for Mr. RP = Overtime hours worked ×Overtime wage rate=(49 hours– 40 hours)×($26.90×1.5)= 9 hours×$40.35 per hour= $363.15

Calculate social security tax for Ms. GB.

Social security tax for Ms. GB = Taxable wages × Social security tax rate= $843.35×6.2%=$52.29

Calculate social security tax for Mr. AG.

Social security tax for Mr. AG = Taxable wages × Social security tax rate= $1,268.25×6.2%=$78.63

Calculate social security tax for Mr. RP.

Social security tax for Mr. RP = Taxable wages × Social security tax rate= $1,439.15×6.2%=$89.23

Calculate social security tax for Ms. SR.

Social security tax for Ms. SR = Taxable wages × Social security tax rate= $548×6.2%=$33.98

Calculate Medicare tax for Ms. GB.

Medicare tax for Ms. GB = Taxable wages × Medicare tax rate= $843.35×1.45%=$12.23

Calculate Medicare tax for Mr. AG.

Medicare tax for Mr. AG = Taxable wages × Medicare tax rate= $1,268.25×1.45%=$18.39

Calculate Medicare tax for Mr. RP.

Medicare tax for Mr. RP = Taxable wages × Medicare tax rate= $1,439.15×1.45%=$20.87

Calculate Medicare tax for Ms. SR.

Medicare tax for Ms. SR = Taxable wages × Medicare tax rate= $548.00×1.45%=$7.95

Calculate the amount of Federal income tax for Ms. SR.

Mr. AA is single, claims zero withholding allowances, and earned weekly salary of $548.00. Hence, by using withholding table (Refer figure 10.2A) his Federal income tax amount would be $67.

Notes:

  • Gross earnings are calculated by using the following formula:

Gross Earnings = RegularTime Earnings+OvertimeEarnings

  • Net pay is calculated by using the following formula:

Net pay = Gross earnings – Social security TaxMedicare TaxFederal income Tax

8.

To determine

Journalize the entry to record the payroll on December 21, 2019.

8.

Expert Solution
Check Mark

Explanation of Solution

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

  • Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.
  • Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

Prepare general journal entry to record the payroll on December 21, 2019.

General JournalPage 32
DateAccounts and ExplanationPost RefDebit ($)Credit ($)
2019Office Wages Expense 1,391.35 
 December21Delivery Wages Expense 2,707.40 
  Social Security Taxes Payable  254.13
Medicare Taxes Payable59.44
Employees Income Taxes Payable760.00
Wages Payable3,025.18
    (To record wages expense and payroll withholdings)   

Table (2)

  • Office Wages expense is an expense and it decreases equity value. So, debit it by $1,391.35.
  • Delivery Wages expense is an expense and it decreases equity value. So, debit it by $2,707.40.
  • Social security taxes payable is a liability and it is increased. So, credit it by $254.13.
  • Medicare taxes payable is a liability and it is increased. So, credit it by $59.44.
  • Employee income taxes payable is a liability and it is increased. So, credit it by $760.00.
  • Wages payable is a liability and it is increased. So, credit it by $3,025.18.

9.

To determine

Journalize the entry to record the payment of weekly payroll on December 23, 2019.

9.

Expert Solution
Check Mark

Explanation of Solution

Prepare general journal entry to record payment of weekly payroll on December 23, 2019.

General JournalPage 32
DateAccounts and ExplanationPost RefDebit ($)Credit ($)
2019Wages Payable 3,025.18 
 December 23 Cash  3,025.18
    (To record the payment of weekly payroll)   

Table (3)

  • Wages payable is a liability and it is decreased. So, debit it by $3,025.18.
  • Cash is an asset and it is decreased. So, credit it by $3,025.18.

Analyze: The percentage of delivery wages was 66.05%(2,707.404,098.75×100) of total taxable wages.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Belle Garments manufactures customized T-shirts for football teams. The business uses a perpetual inventory system and has a highly labour-intensive production process, so it assigns manufacturing overhead based on direct labour cost. The business operates at a profit margin of 33% on sales. Belle Garments expects to incur $2,205,000 of manufacturing overhead costs and estimated direct labour costs of $3,150,000 during 2025. At the end of December 2024, Belle Line Garments reported work in process inventory of $93,980 - Job FBT 101 - $51,000 & Job FBT 102 - $42,980 The following events occurred during January 2025. i) Purchased materials on account, $388,000. The purchase attracted freight charges of $4,000 ii) Incurred manufacturing wages of $400,000 iii) Requisitioned direct materials and used direct labour in manufacturing. Job # FBT 101 FBT 102 FBT 103 FBT 104 Direct Materials $70,220 97,500 105,300 117,000 iv) Issued indirect materials to production, $30,000. Direct Labour $61,200…
The trial balance for K and J Nursery, Incorporated, listed the following account balances at December 31, 2024, the end of its fiscal year: cash, $27,000; accounts receivable, $22,000; inventory, $36,000; equipment (net), $91,000; accounts payable, $25,000; salaries payable, $10,500; interest payable, $6,500; notes payable (due in 18 months), $41,000; common stock, $72,000. Determine the year-end balance in retained earnings for K and J Nursery, Incorporated.
What would be the total production engineering cost per unit

Chapter 10 Solutions

COLLEGE ACCOUNTING LOOSE-LEAF + CONNECT

Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
PAYROLL ACCT., 2019 ED.(LL)-TEXT
Accounting
ISBN:9781337619783
Author:BIEG
Publisher:CENGAGE L
Text book image
College Accounting, Chapters 1-27 (New in Account...
Accounting
ISBN:9781305666160
Author:James A. Heintz, Robert W. Parry
Publisher:Cengage Learning
Text book image
Century 21 Accounting General Journal
Accounting
ISBN:9781337680059
Author:Gilbertson
Publisher:Cengage
Text book image
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Text book image
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Text book image
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning