Wage and tax statement data and employer FICA tax
Obj. 2, 3
Jocame Inc. began business on January 2, 20Y7. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal income tax were withheld in the required amounts. An employee who is hired in the middle of the month receives half the monthly salary for that month. All required payroll tax reports were filed, and the correct amount of payroll taxes was remitted by the company for the calendar year. Early in 20Y8, before the Wage and Tax Statements (Form W-2) could be prepared for distribution to employees and for filing with the Social Security Administration, the employees’ earnings records were inadvertently destroyed.
None of the employees resigned or were discharged during the year, and there were no changes in salary rates. The social security tax was withheld at the rate of 6.0% and Medicare tax at the rate of 1.5% on salary. Data on dates of employment, salary rates, and employees’ income taxes withheld, which are summarized as follows, were obtained from personnel records and payroll records:
Instructions
1. Calculate the amounts to be reported on each employee’s Wage and Tax Statement (Form W-2) for 20Y7, arranging the data in the following form:
2. Calculate the following employer payroll taxes for the year: (a) social security; (b) Medicare; (c) state unemployment compensation at 5.4% on the first $10,000 of each employee’s earnings; (d) federal unemployment compensation at 0.6% on the first $10,000 of each employee’s earnings; (e) total.
Answer
Check Figure: $25,017.38
PR 11-4B
Payroll register
Obj. 2, 3
The following data for Flexco Inc. relate to the payroll for the week ended December 9, 20Y8:
Employees Grove and Seaver are office staff, and all of the other employees are sales personnel. All sales personnel are paid 1½ times the regular rate for all hours in excess of 40 hours per week. The social security tax rate is 6.0% of each employee’s annual earnings, and Medicare tax is 1.5% of each employee’s annual earnings. The next payroll check to be used is No. 328.
Instructions
1. Prepare a payroll register for Flexco Inc. for the week ended December 9, 20Y8. Use the following columns for the payroll register: Employee, Total Hours, Regular Earnings, Overtime Earnings, Total Earnings, Social Security Tax, Medicare Tax, Federal Income Tax, Retirement Savings, Total Deductions, Net Pay, Ck. No., Sales Salaries Expense, and Office Salaries Expense.
Answer
Check Figure: Total net pay, $16,592.58
2. Journalize the entry to record the payroll for the week.
PR 11-5B
Payroll accounts and year-end entries
Obj. 2, 3, 4
The following accounts, with the balances indicated, appear in the ledger of Codigo Co. on December 1 of the current year:
The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December:
Instructions
1. Journalize the transactions.
2. Journalize the following adjusting entries on December 31:
1. Salaries accrued: sales salaries, $4,275; officers salaries, $2,175; office salaries, $825. The payroll taxes are immaterial and are not accrued.
2. Vacation pay, $13,350.
11-7hComprehensive Problem 3
Selected transactions completed by Kornett Company during its first fiscal year ended December 31, 20Y8, were as follows:
Instructions
1. Journalize the selected transactions.
2. Based on the following data, prepare a bank reconciliation for December of the current year:
1. Balance according to the bank statement at December 31, $283,000.
2. Balance according to the ledger at December 31, $245,410.
3. Checks outstanding at December 31, $68,540.
4. Deposit in transit, not recorded by bank, $29,500.
5. Bank debit memo for service charges, $750.
6. A check for $12,700 in payment of an invoice was incorrectly recorded in the accounts as $12,000.
3. Based on the bank reconciliation prepared in (2), journalize the entry or entries to be made by Kornett Company.
4. Based on the following selected data, journalize the adjusting entries as of December 31 of the current year:
1. Estimated uncollectible accounts at December 31, $16,000, based on an aging of accounts receivable. The balance of Allowance for Doubtful Accounts at December 31 was $2,000 (debit).
2. The physical inventory on December 31 indicated an inventory shrinkage of $3,300.
3. Prepaid insurance expired during the year, $22,820.
4. Office supplies used during the year, $3,920.
5. Depreciation is computed as follows:
6. A patent costing $48,000 when acquired on January 2 has a remaining legal life of 10 years and is expected to have value for eight years.
7. The cost of mineral rights was $546,000. Of the estimated deposit of 910,000 tons of ore, 50,000 tons were mined and sold during the year.
8. Vacation pay expense for December, $10,500.
9. A product warranty was granted beginning December 1 and covering a one-year period. The estimated cost is 4% of sales, which totaled $1,900,000 in December.
10. Interest was accrued on the note receivable received on October 17.
5. Based on the following information and the post-closing trial balance that follows, prepare a balance sheet in report form at December 31 of the current year:
Check Figure: Total assets, $3,569,290
11-7iCases & Projects