A company has 100 employees, each working 40 hours per week and earning $16 an hour. Although the company doesnot pay any health or retirement benefits, one of the perks of working at the company is that employees are allowed freeskiing on their days off. Federal income taxes are withheld at 15% and state income taxes at 5%. FICA taxes are 7.65% ofthe first $128,400 earned per employee and 1.45% thereafter. Unemployment taxes are 6.2% of the first $7,000 earned peremployee.2. Compute the total payroll tax expense the company will pay for the first week of January in addition to the total salary expense andemployee withholdings calculated in Part 1.Total payroll tax expense

Payroll Tax: A payroll tax is a percentage deducted from an employee's pay by an employer This tax…

Answered: A company has 100 employees, each…

College Accounting (Book Only): A Career Approach

12th Edition

ISBN:9781305084087

Author:Cathy J. Scott

Publisher:Cathy J. Scott

Chapter7: Employee Earnings And Deductions

Section: Chapter Questions

Problem 2E

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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?
_____1. Johnson Industries, a semiweekly depositor, pays its employees every Friday. When should the company deposit the employment taxes for each weekly payday? _____2. What rule should Bartlett Repair, a new company, follow in making its deposits for accumulated employment taxes? _____3. Quail Hollow Motors (a semiweekly depositor) accumulates taxes of 105,000 on Monday and must deposit this amount on Tuesday, the next banking day. On Tuesday, the company accumulates additional taxes of 20,000. What deposit rule should Quail Hollow Motors follow for depositing the additional 20,000?
A company has 100 employees, each working 40 hours per week and earning $16 an hour. Although the company does not pay any health or retirement benefits, one of the perks of working at the company is that employees are allowed free skiing on their days off. Federal income taxes are withheld at 15% and state income taxes at 5%. FICA taxes are 7.65% of the first $128,400 earned per employee and 1.45% thereafter. Unemployment taxes are 6.2% of the first $7,000 earned per employee. Required: 1. Compute the total salary expense, the total withholdings from employee salaries, and the actual direct deposit of payroll for the first week of January. Total salary expense Total withholdings Actual direct deposit
Aspen Ski Resorts has 100 employees, each working 40 hours per week and earning $20 an hour. Although the company does not pay any health or retirement benefits, one of the perks of working at Aspen is that employees are allowed free skiing on their days off. Federal income taxes are withheld at 15% and state income taxes at 5%. FICA taxes are 7.65% of the first $128, 400 earned per employee and 1.45% thereafter. Unemployment taxes are 6.2% of the first $7,000 earned per employee. Exercise 8 - 7A Part 1 Required: 1. Compute the total salary expense, the total withholdings from emplodddAspen Ski Resorts has 100 employees, each working 40 hours per week and earning $20 an hour. Although the company does not pay any health or retirement benefits, one of the perks of working at Aspen is that employees are allowed free skiing on their days off. Federal income taxes are withheld at 15% and state income taxes at 5 %. FICA taxes are 7.65% of the first $128, 400 earned per employee and 1.45%…
Aspen Ski Resorts has 150 employees, each working 40 hours per week and earning $19 an hour. Although the company does not pay any health or retirement benefits, one of the perks of working at Aspen is that employees are allowed free skiing on their days off. Federal income taxes are withheld at 15% and state income taxes at 5%. FICA taxes are 7.65% of the first $142,800 earned per employee and 1.45% thereafter. Unemployment taxes are 6.2% of the first $7,000 earned per employee. Required: 1. Compute the total salary expense, the total withholdings from employee salaries, and the actual direct deposit of payroll for the first week of January. 2. Compute the total payroll tax expense Aspen Ski Resorts will pay for the first week of January in addition to the total salary expense and employee withholdings calculated in Part 1. 3. How should Aspen Ski Resorts account for the free skiing given to employees on their days off?
A company has four employees who each work 40 hours per week and earn $38 per hour. Federal tax on the total wages for all four employees is $742 and state tax is $340. Social Security tax withheld from employees is 6.2% and Medicare tax is 1.45% of gross pay. Federal unemployment tax is .8% and state unemployment tax is 5.4% of gross pay. What is the total amount of payroll tax expense that the employer must pay for one week's wages? (Round to the nearest cent.) %24
Mike Smith is a college football coach making a base salary of $720,000 a year ($60,000 per month). Employers are required to withhold a 6.2% Social Security tax up to a maximum base amount and a 1.45% Medicare tax with no maximum. Unemployment taxes are 6.2% of the first $9,000 earned per employee. 1. Assuming the Social Security base amount is $118,500, compute how much will be withheld during the year for Coach Smith's Social Security and Medicare. (Round your answer to the nearest dollar amount.) Total withheld for Social Security and Medicare during the year hrough what month will Social Security be withheld?multiple choice February January April March 3. What additional amount will the employer need to pay, assuming unemployment taxes of 6.2%? (Round your answer to the nearest dollar amount.) Additional contribution
William Corp. pays its employees every two weeks. Employee wages earned over a two-week period is $250,000. All wages are subject to social security and Medicare taxes, while $50,000 of wages are subject to federal and state unemployment taxes. Tax rates are the following: • Social security tax 6.0%• Medicare tax 1.5%• State unemployment compensation tax 5.4%• Federal unemployment compensation tax 0.8% Additionally, the total amount withheld from wages for federal income taxes is $75,000 and the total amount withheld for state income taxes is $12,500. ________________________________________ When William Corp. records the journal entry to recognize payroll every two weeks, Employees’ State Income Tax Payable will be: Question 24 options: Debited for $12,500 Credited for $75,000 Debited for $75,000 Neither debited nor credited Credited for $12,500
William Corp. pays its employees every two weeks. Employee wages earned over a two-week period is $250,000. All wages are subject to social security and Medicare taxes, while $50,000 of wages are subject to federal and state unemployment taxes. Tax rates are the following: • Social security tax 6.0%• Medicare tax 1.5%• State unemployment compensation tax 5.4%• Federal unemployment compensation tax 0.8% Additionally, the total amount withheld from wages for federal income taxes is $75,000 and the total amount withheld for state income taxes is $12,500. ________________________________________ When William Corp. records the journal entry to recognize payroll every two weeks, Payroll Tax Expense will be: Question 30 options: Debited for $75,000 Credited for $12,500 Debited for $12,500 Credited for $75,000 Neither debited nor credited
William Corp. pays its employees every two weeks. Employee wages earned over a two-week period is $250,000. All wages are subject to social security and Medicare taxes, while $50,000 of wages are subject to federal and state unemployment taxes. Tax rates are the following: • Social security tax 6.0%• Medicare tax 1.5%• State unemployment compensation tax 5.4%• Federal unemployment compensation tax 0.8% Additionally, the total amount withheld from wages for federal income taxes is $75,000 and the total amount withheld for state income taxes is $12,500. ________________________________________ When William Corp. records the journal entry to recognize payroll tax expense every two weeks, Social Security Tax Payable will be: Neither debited nor credited Debited for $15,000 Credited for $15,000 Credited for $3,750 Debited for $3,750
William Corp. pays its employees every two weeks. Employee wages earned over a two-week period is $250,000. All wages are subject to social security and Medicare taxes, while $50,000 of wages are subject to federal and state unemployment taxes. Tax rates are the following: • Social security tax 6.0%• Medicare tax 1.5%• State unemployment compensation tax 5.4%• Federal unemployment compensation tax 0.8% Additionally, the total amount withheld from wages for federal income taxes is $75,000 and the total amount withheld for state income taxes is $12,500. ________________________________________ When William Corp. records the journal entry to recognize payroll tax expense every two weeks, Medicare Tax Payable will be: Question 27 options: Credited for $15,000 Credited for $3,750 Neither debited nor credited Debited for $15,000 Debited for $3,750
William Corp. pays its employees every two weeks. Employee wages earned over a two-week period is $250,000. All wages are subject to social security and Medicare taxes, while $50,000 of wages are subject to federal and state unemployment taxes. Tax rates are the following: • Social security tax 6.0%• Medicare tax 1.5%• State unemployment compensation tax 5.4%• Federal unemployment compensation tax 0.8% Additionally, the total amount withheld from wages for federal income taxes is $75,000 and the total amount withheld for state income taxes is $12,500. ________________________________________ When William Corp. records the journal entry to recognize payroll every two weeks, State Unemployment Tax Payable will be: Question 31 options: Debited for $12,500 Credited for $75,000 Credited for $12,500 Neither debited nor credited Debited for $75,000

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