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During the third calendar quarter of 20--, Bayview Inn, owned by Diane R. Peters, employed the persons listed below. Also given are the employees’ salaries or wages and the amount of tips reported to the owner. The tips were reported by the 10th of each month. The federal income tax and FICA tax to be withheld from the tips were estimated by the owner and withheld equally over the 13 weekly pay periods. The employer’s portion of FICA tax on the tips was estimated as the same amount.
Employees are paid weekly on Friday. The following paydays occurred during this quarter:
Taxes withheld for the 13 paydays in the third quarter follow:
Based on the information given, complete Form 941 on the following pages for Diane R. Peters.
Phone number: (901) 555-7959
Date filed: October 31, 20--
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Chapter 3 Solutions
PAYROLL ACCT.,2019 ED.(LL)-TEXT
- Payrex Co. has six employees. All are paid on a weekly basis. For the payroll period ending January 7, total employee earnings were 12,500, all of which were subject to SUTA, FUTA, Social Security, and Medicare taxes. The SUTA tax rate in Payrexs state is 5.4%, but Payrex qualifies for a rate of 2.0% because of its good record of providing regular employment to its employees. Other employer payroll taxes are at the rates described in the chapter. REQUIRED 1. Calculate Payrexs FUTA, SUTA, Social Security, and Medicare taxes for the week ended January 7. 2. Prepare the journal entry for Payrexs payroll taxes for the week ended January 7. 3. What amount of payroll taxes did Payrex save because of its good employment record?arrow_forwardFor tax purposes, assume that the maximum taxable earnings are 118,500 for Social Security and 7,000 for the unemployment tax and that all earnings are taxable for Medicare. For the payroll register for the month of November for Shelby, Inc., determine the taxable earnings for each employee.arrow_forwardDavis, Inc. paid wages to its employees during the year as follows: a. How much of the total payroll is exempt from the FICA rate of 8%? b. How much of the total payroll is exempt from federal and state unemployment taxes? c. How much of the total payroll is exempt from federal income tax withholding?arrow_forward
- Wallace Corporation summarizes the following information from its weekly payroll records during April. Prepare the two journal entries to record the payment of the payroll and the accrual of its payroll taxes for April. Assume an 8% FICA rate for both employees and the employer. Also assume a 5.4% state unemployment tax rate, a 0.6% federal unemployment tax rate, and that all wages are subject to all payroll taxes. Round to the nearest dollar.arrow_forwardAudrey Martin and Beth James are partners in the Country Gift Shop, which employs the individuals listed below. Paychecks are distributed every Friday to all employees. Based on the information given, compute the amounts listed below for a weekly payroll period. Employers OASDI Tax ________ Employers HI Tax ________arrow_forwardDuring the year, employee Sean Matthews earned wages in the amount of 250,000. Discuss how the employees HI tax will differ from the employers HI tax for this employee.arrow_forward
- During 2019, Matti Conner, president of Maggert Company, was paid a semimonthly salary of 6,000. Compute the amount of FICA taxes that should be withheld from her:arrow_forwardEhrlich Co. began business on January 2. Salaries were paid toemployees on the last day of each month, and social security tax,Medicare tax, and federal income tax were withheld in the requiredamounts. An employee who is hired in the middle of the month receiveshalf the monthly salary for that month. All required payroll tax reports were filed, and the correct amount of payroll taxes was remitted by thecompany for the calendar year. Early in the following year, before theWage and Tax Statements (Form W-2) could be prepared for distributionto employees and for filing with the Social Security Administration, theemployees' 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 waswithheld at the rate of 6.0% and Medicare tax at the rate of 1.5% onsalary. Data on dates of employment, salary rates, and employees'income taxes withheld, which are summarized as follows,…arrow_forward
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