Chapter 8, Problem 68E

Payroll Accounting and Discussion of Labor Costs

Blitzen Marketing Research paid its weekly and monthly payroll on January 31. The following information is available about the payroll:

Blitzen will pay both the employer’s taxes and the taxes withheld on April 15.

Required:

1. Prepare the journal entries to record the payroll payment and the incurrence of the associated expenses and liabilities. ( Note: Round to nearest penny.)

2. What is the employees' gross pay? What amount does Blitzen pay in excess of gross pay as a result of taxes? ( Note: Provide both an absolute dollar amount and as a percentage of gross pay, rounding to two decimal places.)

3. How much is the employees' net pay as a percentage of total payroll related expenses? ( Note: Round answer to two decimal places.)

4. CONCEPTUAL CONNECTION If another employee can be hired for $60,000 per year, what would be the total cost of this employee to Blitzen?