(a) 1.
Gross earnings
Gross earnings are a payment made to an employee for completion of work allocated by the company. Gross pay is evaluated by using normal hours worked by the employee with wages rate. Other name of gross earnings is gross pay.
Payroll tax
The costs incurred by an employer to pay the employee for his labor, including other employee benefits, plus the payroll taxes the employer pays to the government, are called payroll tax.
To compute: The gross earnings of using regular pay and overtime pay.
2.
To Compute: FICA taxes for Person M’s wages for the current week.
3.
To Compute: Federal income taxes withheld for Person M’s wages for the current week.
4.
To Compute: State income taxes withheld for Person M’s wages for the current week.
5.
To compute: The net pay using gross earnings, FICA taxes payable and federal income taxes payable.
(b)
Salaries and wages payable
Salaries and wages payable is a payment made to an employee for completion of work allocated by the company. Gross pay is evaluated by using normal hours worked by the employee with wages rate.
To prepare: The
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