The payroll register by filling in the empty cells.

Question

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Answer 1

Question

Chapter 9, Problem 17E

a.

To determine

To prepare:

The payroll register by filling in the empty cells.

a.

Expert Solution

Explanation of Solution

Prepare the payroll register as shown below.

Financial and Managerial Accounting: Information for Decisions, Chapter 9, Problem 17E

Table 1

Working notes:

1. Calculation of FUTA of A.

$\begin{matrix} FUTA of A = 0.6 % of first $ 7, 000 \\ = 0.6 % \times $ 200 \\ = $ 1.2 \end{matrix}$

2. Calculation of FUTA of Z.

$\begin{matrix} FUTA of Z = 0.6 % of first $ 7, 000 \\ = 0.6 % \times $ 500 \\ = $ 3 \end{matrix}$

3. Calculation of FUTA of G.

$\begin{matrix} FUTA of G = 0.6 % of first $ 7, 000 \\ = 0.6 % \times $ 2000 \\ = $ 12 \end{matrix}$

4. Calculation of SUTA of A.

$\begin{matrix} SUTA of A = 5.4 % of first $ 7, 000 \\ = 5.4 % \times $ 200 \\ = $ 10.8 \end{matrix}$

5. Calculation of SUTA of Z.

$\begin{matrix} SUTA of Z = 5.4 % of first $ 7, 000 \\ = 5.4 % \times $ 500 \\ = $ 27 \end{matrix}$

6. Calculation of SUTA of G.

$\begin{matrix} SUTA of G = 5.4 % of first $ 7, 000 \\ = 5.4 % \times $ 2000 \\ = $ 108 \end{matrix}$

7. Calculation of security tax of K.

$\begin{matrix} Social security tax of K = 6.2 % of first $ 118, 500 \\ = 6.2 % \times $ 1800 \\ = $ 111.6 \end{matrix}$

8. Calculation of security tax of A.

$\begin{matrix} Social security tax of A = 6.2 % of first $ 118, 500 \\ = 6.2 % \times $ 500 \\ = $ 31 \end{matrix}$

9. Calculation of security tax of N.

$\begin{matrix} Social security tax of N = 6.2 % of first $ 118, 500 \\ = 6.2 % \times $ 920 \\ = $ 57.04 \end{matrix}$

10. Calculation of security tax of Z.

$\begin{matrix} Social security tax of Z = 6.2 % of first $ 118, 500 \\ = 6.2 % \times $ 860 \\ = $ 53.40 \end{matrix}$

11. Calculation of security tax of G.

$\begin{matrix} Social security tax of G = 6.2 % of first $ 118, 500 \\ = 6.2 % \times $ 740 \\ = $ 46 \end{matrix}$

12. Calculation of Medicare tax of K.

$\begin{matrix} Medicare tax of K = 1.45 % of gross pay \\ = 1.45 % \times $ 7, 000 \\ = $ 101.5 \end{matrix}$

13. Calculation of Medicare tax of A.

$\begin{matrix} Medicare tax of A = 1.45 % of gross pay \\ = 1.45 % \times $ 500 \\ = $ 7.25 \end{matrix}$

14. Calculation of Medicare tax of N.

$\begin{matrix} Medicare tax of N = 1.45 % of gross pay \\ = 1.45 % \times $ 920 \\ = $ 13.34 \end{matrix}$

15. Calculation of Medicare tax of Z.

$\begin{matrix} Medicare tax of Z = 1.45 % of gross pay \\ = 1.45 % \times $ 860 \\ = $ 12.47 \end{matrix}$

16. Calculation of Medicare tax of G.

$\begin{matrix} Medicare tax of G = 1.45 % of gross pay \\ = 1.45 % \times $ 740 \\ = $ 10.73 \end{matrix}$

17. Calculation of employee benefit of K.

$\begin{matrix} Employee benefit of K = 5 % \times Gross Pay \\ = 5 % \times $ 7, 000 \\ = $ 350 \end{matrix}$

18. Calculation of employee benefit of A.

$\begin{matrix} Employee benefit of A = 5 % \times Gross Pay \\ = 5 % \times $ 500 \\ = $ 25 \end{matrix}$

19. Calculation of employee benefit of N.

$\begin{matrix} Employee benefit of N = 5 % \times Gross Pay \\ = 5 % \times $ 920 \\ = $ 46 \end{matrix}$

20. Calculation of employee benefit of Z.

$\begin{matrix} Employee benefit of Z = 5 % \times Gross Pay \\ = 5 % \times $ 860 \\ = $ 43 \end{matrix}$

21. Calculation of employee benefit of G.

$\begin{matrix} Employee benefit of G = 5 % \times Gross Pay \\ = 5 % \times $ 740 \\ = $ 37 \end{matrix}$

22. Calculation of net pay of K.

$\begin{matrix} Net pay of K = [\begin{array}{l} Gross pay - FIT - SIT - Social security tax \\ - Medicare tax - Benefit of employee \end{array}] \\ = $ 7000 - $ 2000 - $ 300 - $ 111.6 - $ 101.5 - $ 350 \\ = $ 4136.9 \end{matrix}$

23. Calculation of net pay of A.

$\begin{matrix} Net pay of A = [\begin{array}{l} Gross pay - FIT - SIT - Social security tax \\ - Medicare tax - Benefit of employee \end{array}] \\ = $ 500 - $ 80 - $ 20 - $ 31 - $ 7.25 - $ 25 \\ = $ 336.75 \end{matrix}$

24. Calculation of net pay of N.

$\begin{matrix} Net pay of N = [\begin{array}{l} Gross pay - FIT - SIT - Social security tax \\ - Medicare tax - Benefit of employee \end{array}] \\ = $ 920 - $ 110 - $ 25 - $ 57.04 - $ 13.34 - $ 46 \\ = $ 668.62 \end{matrix}$

25. Calculation of net pay of Z.

$\begin{matrix} Net pay of Z = [\begin{array}{l} Gross pay - FIT - SIT - Social security tax \\ - Medicare tax - Benefit of employee \end{array}] \\ = $ 860 - $ 100 - $ 22 - $ 53.40 - $ 13.34 - $ 92 \\ = $ 579.26 \end{matrix}$

26. Calculation of net pay of G.

$\begin{matrix} Net pay of G = [\begin{array}{l} Gross pay - FIT - SIT - Social security tax \\ - Medicare tax - Benefit of employee \end{array}] \\ = $ 740 - $ 90 - $ 21 - $ 46 - $ 10.73 - $ 37 \\ = $ 535.27 \end{matrix}$

b.

To determine

To prepare:

The journal entry for accrued biweekly payroll.

b.

Expert Solution

Answer to Problem 17E

Prepare the journal entry for accrued biweekly payroll as shown below.

Date	Particulars	Debit ($)	Credit ($)
Aug 31	Salaries expense	10,020
	FICA - Social security taxes payable		299.04
	FICA - Medicare taxes payable		145.29
	Employee federal taxes payable		2,380
	Employee state taxes payable		388
	Employee benefits plan payable		501
	Salaries payable		6306.67
	(To record the payroll for August)

Table 2

Explanation of Solution

• Salaries expense is an expense account for a company. Since the balance of this account increases, it is debited.

• FICA social security taxes payable is a liability to a company. Its balance increases, so it is credited.

• FICA Medicare taxes payable is a liability to a company. Its balance increases, so it is credited.

• Employee federal taxes payable is a liability to a company. Its balance increases, so it is credited.

• Employee state taxes payable is a liability to a company. Its balance increases, so it is credited.

• Salaries payable is a liability to a company. Its balance increases, so it is credited.

c.

To determine

To prepare:

The journal entry to record employer’s cash payment of the net payroll

c.

Expert Solution

Answer to Problem 17E

Prepare the journal entry to record employer’s cash payment of the net payroll as shown below.

Date	Particulars	Debit ($)	Credit ($)
Aug 31	Salaries payable	6306.67
	Cash		6306.67
	(To record the payment for August)

Table 3

Explanation of Solution

• Salaries payable is a liability to company. Its balance decreases, so it is debited.

• Cash is an asset account. Since the company is paying salaries, cash is reducing. Hence, cash is credited.

d.

To determine

To prepare:

The journal entry to record employer’s payroll taxes.

d.

Expert Solution

Answer to Problem 17E

Prepare the journal entry to record employer’s payroll taxes as shown below.

Date	Particulars	Debit ($)	Credit ($)
Aug31	Payroll taxes expense	3212.33
	Employee benefit plan expenses	1,002
	Employee benefit plan payable		1,002
	FICA - Social security taxes payable		299.04
	FICA - Medicare taxes payable		145.29
	Employee federal taxes payable		2,380
	Employee state taxes payable		388
	(To record the employer’s payroll taxes)

Table 4

Explanation of Solution

• Payroll taxes are an expense account for a company. Since the balance of this account increases, it is debited.

• Employee benefit plan is an expense account for a company. Since the balance of this account increases, it is debited.

• Employee benefit plan is a liability to a company. Its balance increases, so it is credited.

• FICA social security taxes payable is a liability to a company. Its balance increases, so it is credited.

• FICA Medicare taxes payable is a liability to a company. Its balance increases, so it is credited.

• Employee federal taxes payable is a liability to a company. Its balance increases, so it is credited.

• Employee state taxes payable is a liability to a company. Its balance increases, so it is credited.

e.

To determine

To prepare:

The journal entry to pay all liabilities.

e.

Expert Solution

Answer to Problem 17E

Prepare the journal entry to pay all liabilities as shown below.

Date	Particulars	Debit ($)	Credit ($)
Aug 31	FICA - Social security taxes payable	598.08
	FICA - Medicare taxes payable	290.58
	Employee federal taxes payable	2,380
	Employee state taxes payable	388
	Employee benefits plan payable	1,503
	FUTA payable	16.2
	SUTA payable	145.8
	Cash		5321.66
	(To record the payment of all liabilities)

Table 5

Explanation of Solution

• FICA Social security taxes payable is a liability to a company. Its balance decreases, so it is debited.

• FICA Medicare taxes payable is a liability to a company. Its balance decreases, so it is debited.

• Employee federal taxes payable is a liability to a company. Its balance decreases, so it is debited.

• Employee state taxes payable is a liability to a company. Its balance decreases, so it is debited.

• Employee benefit plan is a liability to a company. Its balance decreases, so it is debited.

• FUTA payable is a liability to a company. Its balance decreases, so it is debited.

• SUTA payable is a liability to company. Its balance decreases, so it is debited.

• Cash is an asset account. Since company is paying salaries, its liability decreases. Hence, cash is credited.

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Answer 2

Question

Chapter 9, Problem 17E

a.

To determine

To prepare:

The payroll register by filling in the empty cells.

a.

Expert Solution

Explanation of Solution

Prepare the payroll register as shown below.

Financial and Managerial Accounting: Information for Decisions, Chapter 9, Problem 17E

Table 1

Working notes:

1. Calculation of FUTA of A.

$\begin{matrix} FUTA of A = 0.6 % of first $ 7, 000 \\ = 0.6 % \times $ 200 \\ = $ 1.2 \end{matrix}$

2. Calculation of FUTA of Z.

$\begin{matrix} FUTA of Z = 0.6 % of first $ 7, 000 \\ = 0.6 % \times $ 500 \\ = $ 3 \end{matrix}$

3. Calculation of FUTA of G.

$\begin{matrix} FUTA of G = 0.6 % of first $ 7, 000 \\ = 0.6 % \times $ 2000 \\ = $ 12 \end{matrix}$

4. Calculation of SUTA of A.

$\begin{matrix} SUTA of A = 5.4 % of first $ 7, 000 \\ = 5.4 % \times $ 200 \\ = $ 10.8 \end{matrix}$

5. Calculation of SUTA of Z.

$\begin{matrix} SUTA of Z = 5.4 % of first $ 7, 000 \\ = 5.4 % \times $ 500 \\ = $ 27 \end{matrix}$

6. Calculation of SUTA of G.

$\begin{matrix} SUTA of G = 5.4 % of first $ 7, 000 \\ = 5.4 % \times $ 2000 \\ = $ 108 \end{matrix}$

7. Calculation of security tax of K.

$\begin{matrix} Social security tax of K = 6.2 % of first $ 118, 500 \\ = 6.2 % \times $ 1800 \\ = $ 111.6 \end{matrix}$

8. Calculation of security tax of A.

$\begin{matrix} Social security tax of A = 6.2 % of first $ 118, 500 \\ = 6.2 % \times $ 500 \\ = $ 31 \end{matrix}$

9. Calculation of security tax of N.

$\begin{matrix} Social security tax of N = 6.2 % of first $ 118, 500 \\ = 6.2 % \times $ 920 \\ = $ 57.04 \end{matrix}$

10. Calculation of security tax of Z.

$\begin{matrix} Social security tax of Z = 6.2 % of first $ 118, 500 \\ = 6.2 % \times $ 860 \\ = $ 53.40 \end{matrix}$

11. Calculation of security tax of G.

$\begin{matrix} Social security tax of G = 6.2 % of first $ 118, 500 \\ = 6.2 % \times $ 740 \\ = $ 46 \end{matrix}$

12. Calculation of Medicare tax of K.

$\begin{matrix} Medicare tax of K = 1.45 % of gross pay \\ = 1.45 % \times $ 7, 000 \\ = $ 101.5 \end{matrix}$

13. Calculation of Medicare tax of A.

$\begin{matrix} Medicare tax of A = 1.45 % of gross pay \\ = 1.45 % \times $ 500 \\ = $ 7.25 \end{matrix}$

14. Calculation of Medicare tax of N.

$\begin{matrix} Medicare tax of N = 1.45 % of gross pay \\ = 1.45 % \times $ 920 \\ = $ 13.34 \end{matrix}$

15. Calculation of Medicare tax of Z.

$\begin{matrix} Medicare tax of Z = 1.45 % of gross pay \\ = 1.45 % \times $ 860 \\ = $ 12.47 \end{matrix}$

16. Calculation of Medicare tax of G.

$\begin{matrix} Medicare tax of G = 1.45 % of gross pay \\ = 1.45 % \times $ 740 \\ = $ 10.73 \end{matrix}$

17. Calculation of employee benefit of K.

$\begin{matrix} Employee benefit of K = 5 % \times Gross Pay \\ = 5 % \times $ 7, 000 \\ = $ 350 \end{matrix}$

18. Calculation of employee benefit of A.

$\begin{matrix} Employee benefit of A = 5 % \times Gross Pay \\ = 5 % \times $ 500 \\ = $ 25 \end{matrix}$

19. Calculation of employee benefit of N.

$\begin{matrix} Employee benefit of N = 5 % \times Gross Pay \\ = 5 % \times $ 920 \\ = $ 46 \end{matrix}$

20. Calculation of employee benefit of Z.

$\begin{matrix} Employee benefit of Z = 5 % \times Gross Pay \\ = 5 % \times $ 860 \\ = $ 43 \end{matrix}$

21. Calculation of employee benefit of G.

$\begin{matrix} Employee benefit of G = 5 % \times Gross Pay \\ = 5 % \times $ 740 \\ = $ 37 \end{matrix}$

22. Calculation of net pay of K.

$\begin{matrix} Net pay of K = [\begin{array}{l} Gross pay - FIT - SIT - Social security tax \\ - Medicare tax - Benefit of employee \end{array}] \\ = $ 7000 - $ 2000 - $ 300 - $ 111.6 - $ 101.5 - $ 350 \\ = $ 4136.9 \end{matrix}$

23. Calculation of net pay of A.

$\begin{matrix} Net pay of A = [\begin{array}{l} Gross pay - FIT - SIT - Social security tax \\ - Medicare tax - Benefit of employee \end{array}] \\ = $ 500 - $ 80 - $ 20 - $ 31 - $ 7.25 - $ 25 \\ = $ 336.75 \end{matrix}$

24. Calculation of net pay of N.

$\begin{matrix} Net pay of N = [\begin{array}{l} Gross pay - FIT - SIT - Social security tax \\ - Medicare tax - Benefit of employee \end{array}] \\ = $ 920 - $ 110 - $ 25 - $ 57.04 - $ 13.34 - $ 46 \\ = $ 668.62 \end{matrix}$

25. Calculation of net pay of Z.

$\begin{matrix} Net pay of Z = [\begin{array}{l} Gross pay - FIT - SIT - Social security tax \\ - Medicare tax - Benefit of employee \end{array}] \\ = $ 860 - $ 100 - $ 22 - $ 53.40 - $ 13.34 - $ 92 \\ = $ 579.26 \end{matrix}$

26. Calculation of net pay of G.

$\begin{matrix} Net pay of G = [\begin{array}{l} Gross pay - FIT - SIT - Social security tax \\ - Medicare tax - Benefit of employee \end{array}] \\ = $ 740 - $ 90 - $ 21 - $ 46 - $ 10.73 - $ 37 \\ = $ 535.27 \end{matrix}$

b.

To determine

To prepare:

The journal entry for accrued biweekly payroll.

b.

Expert Solution

Answer to Problem 17E

Prepare the journal entry for accrued biweekly payroll as shown below.

Date	Particulars	Debit ($)	Credit ($)
Aug 31	Salaries expense	10,020
	FICA - Social security taxes payable		299.04
	FICA - Medicare taxes payable		145.29
	Employee federal taxes payable		2,380
	Employee state taxes payable		388
	Employee benefits plan payable		501
	Salaries payable		6306.67
	(To record the payroll for August)

Table 2

Explanation of Solution

• Salaries expense is an expense account for a company. Since the balance of this account increases, it is debited.

• FICA social security taxes payable is a liability to a company. Its balance increases, so it is credited.

• FICA Medicare taxes payable is a liability to a company. Its balance increases, so it is credited.

• Employee federal taxes payable is a liability to a company. Its balance increases, so it is credited.

• Employee state taxes payable is a liability to a company. Its balance increases, so it is credited.

• Salaries payable is a liability to a company. Its balance increases, so it is credited.

c.

To determine

To prepare:

The journal entry to record employer’s cash payment of the net payroll

c.

Expert Solution

Answer to Problem 17E

Prepare the journal entry to record employer’s cash payment of the net payroll as shown below.

Date	Particulars	Debit ($)	Credit ($)
Aug 31	Salaries payable	6306.67
	Cash		6306.67
	(To record the payment for August)

Table 3

Explanation of Solution

• Salaries payable is a liability to company. Its balance decreases, so it is debited.

• Cash is an asset account. Since the company is paying salaries, cash is reducing. Hence, cash is credited.

d.

To determine

To prepare:

The journal entry to record employer’s payroll taxes.

d.

Expert Solution

Answer to Problem 17E

Prepare the journal entry to record employer’s payroll taxes as shown below.

Date	Particulars	Debit ($)	Credit ($)
Aug31	Payroll taxes expense	3212.33
	Employee benefit plan expenses	1,002
	Employee benefit plan payable		1,002
	FICA - Social security taxes payable		299.04
	FICA - Medicare taxes payable		145.29
	Employee federal taxes payable		2,380
	Employee state taxes payable		388
	(To record the employer’s payroll taxes)

Table 4

Explanation of Solution

• Payroll taxes are an expense account for a company. Since the balance of this account increases, it is debited.

• Employee benefit plan is an expense account for a company. Since the balance of this account increases, it is debited.

• Employee benefit plan is a liability to a company. Its balance increases, so it is credited.

• FICA social security taxes payable is a liability to a company. Its balance increases, so it is credited.

• FICA Medicare taxes payable is a liability to a company. Its balance increases, so it is credited.

• Employee federal taxes payable is a liability to a company. Its balance increases, so it is credited.

• Employee state taxes payable is a liability to a company. Its balance increases, so it is credited.

e.

To determine

To prepare:

The journal entry to pay all liabilities.

e.

Expert Solution

Answer to Problem 17E

Prepare the journal entry to pay all liabilities as shown below.

Date	Particulars	Debit ($)	Credit ($)
Aug 31	FICA - Social security taxes payable	598.08
	FICA - Medicare taxes payable	290.58
	Employee federal taxes payable	2,380
	Employee state taxes payable	388
	Employee benefits plan payable	1,503
	FUTA payable	16.2
	SUTA payable	145.8
	Cash		5321.66
	(To record the payment of all liabilities)