**Karen's Cupcakes Payroll Overview**Karen Jolly operates a bakery called Karen’s Cupcakes. She has five employees, all of whom are paid on a weekly basis. Karen’s Cupcakes uses a payroll register, individual employee earnings records, and a general journal.Karen’s Cupcakes utilizes a weekly federal income tax withholding table. The payroll data for each employee for the week ending February 15 is provided below. Employees are paid 1.5 times the regular rate for working over 40 hours a week.**Employee Payroll Data**| Name | No. of Allowances | Marital Status | Total Hours Worked Feb. 9–15 | Rate | Total Earnings Jan. 1–Feb. 8 ||-----------------|-------------------|----------------|------------------------------|-------|-----------------------------|| Barone, William | 1 | S | 40 | $14.00| $3,360.00 || Hastings, Gene | 4 | M | 45 | $15.00| $3,870.00 || Nitobe, Isako | 3 | M | 46 | $12.00| $3,168.00 || Smith, Judy | 2 | M | 42 | $13.00| $3,276.00 || Tarshis, Dolores| 1 | S | 39 | $14.50| $3,480.00 |**Tax and Deductions**- **Social Security Tax:** Withheld at 6.2% from the first $128,400 of earnings.- **Medicare Tax:** Withheld at 1.45%.- **City Earnings Tax:** Withheld at 1%.- **Health Insurance:** Hastings and Smith have $15 withheld, and Nitobe and Tarshis have $25 withheld.- **Savings Bond Purchase Plan:** Hastings has $18.75 withheld, and Smith has $43.75 withheld.Karen’s Cupcakes pays payroll by drawing checks from its regular bank account. The checks are issued sequentially, starting with No. 365.

The journal entries are given as,

Answered: come tax withholding table like the one…

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come tax withholding table like the one in Figure 8- Employees are paid 1% times the regular rate for w

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

**Karen's Cupcakes Payroll Overview**

Karen Jolly operates a bakery called Karen’s Cupcakes. She has five employees, all of whom are paid on a weekly basis. Karen’s Cupcakes uses a payroll register, individual employee earnings records, and a general journal.

Karen’s Cupcakes utilizes a weekly federal income tax withholding table. The payroll data for each employee for the week ending February 15 is provided below. Employees are paid 1.5 times the regular rate for working over 40 hours a week.

**Employee Payroll Data**

| Name | No. of Allowances | Marital Status | Total Hours Worked Feb. 9–15 | Rate | Total Earnings Jan. 1–Feb. 8 |
|-----------------|-------------------|----------------|------------------------------|-------|-----------------------------|
| Barone, William | 1 | S | 40 | $14.00| $3,360.00 |
| Hastings, Gene | 4 | M | 45 | $15.00| $3,870.00 |
| Nitobe, Isako | 3 | M | 46 | $12.00| $3,168.00 |
| Smith, Judy | 2 | M | 42 | $13.00| $3,276.00 |
| Tarshis, Dolores| 1 | S | 39 | $14.50| $3,480.00 |

**Tax and Deductions**

- **Social Security Tax:** Withheld at 6.2% from the first $128,400 of earnings.
- **Medicare Tax:** Withheld at 1.45%.
- **City Earnings Tax:** Withheld at 1%.
- **Health Insurance:** Hastings and Smith have $15 withheld, and Nitobe and Tarshis have $25 withheld.
- **Savings Bond Purchase Plan:** Hastings has $18.75 withheld, and Smith has $43.75 withheld.

Karen’s Cupcakes pays payroll by drawing checks from its regular bank account. The checks are issued sequentially, starting with No. 365.

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