Question

1. SANCHEZ COMPUTER CENTER
During the month of November the following transactions occurred.
a. Record the following transactions in the general journal and post them to the general ledger.
b. Prepare a trial balance as of November 30, 201X.
Assume the following transactions:
Nov. 1 Billed Vita Needle Company $6,800, invoice no. 12675, for services rendered.
Nov. 3 Billed Accu Pac, Inc., $3,900, invoice no. 12676, for services rendered.
Nov. 5 Purchased new shop benches for $1,400 on account from System Design Furniture.
Nov. 9 Received the phone bill, $150.
Nov. 12 Collected $500 of the amount due from Taylor Golf.
Nov. 18 Collected $800 of the amount due from Taylor Golf.
Nov. 20 Purchased a fax machine for the office from Multi Systems, Inc., on credit, $450.00.
In preparing for next year, on December 1 Tony Freedman hired two hourly employees to assist with some troubleshooting and repair work.
a. Prepare a payroll register for the three pay periods.
b. Record the following transactions in the general journal and post them to the general ledger.
Assume the following transactions:
Dec. 7 Paid employee wages: Lance Kumm, 38 hours, and Anthony Hall, 42 hours.
Dec. 14 Paid employee wages: Lance Kumm, 25 hours, and Anthony Hall, 36 hours.
Dec. 21 Paid employee wages: Lance Kumm, 26 hours, and Anthony Hall, 35 hours.
And, assume the following:
a. The following accounts have been added to the chart of accounts: Wages Payable #2010, FICA OASDI Payable #2020, FICA Medicare Payable #2030, FIT Payable #2040, State Income Tax Payable #2050, FUTA Tax Payable 2060, SUTA Tax Payable #2070, 2010 Wages Expense #5110, and Payroll Tax Expense #5120.
b. Assume FICA OASDI is taxed at 6.2% up to $106,800 in earnings and Medicare is taxed at 1.45% on all earnings.
c. State income tax is 2% of gross pay.
d. None of the employees has federal income tax taken out of his or her pay.
e. Each employee earns $10 an hour and is paid 1½ times salary for hours worked in excess of 40 weekly.
As December ends, Tony Freedman wants to take care of his payroll obligations. He will complete Form 941 for the fourth quarter of the current year and Form 940 for federal unemployment taxes. Tony will make the necessary deposits and payments associated with his payroll.
Tasks
a. Using the information in the problem, record the December payrolls and the payment of the payrolls in the general journal and post them to the general ledger.
b. Using the information in this problem, record the payroll tax expense for the fourth quarter in the general journal. Use December 31 as the date of the journal entry to record the payroll tax expense for the entire quarter. Post the entry to the general journal.
c. Record the payment of each tax liability in the general journal and post each entry to the general ledger. Sanchez Computer Center is classified as a quarterly depositor. The company wishes to pay all payroll taxes on December 31 even if no deposits are required.
d. Prepare Form 941 for the fourth quarter. Sanchez Computer Center’s employer identification number is 35-4132588.
e. Complete Form 940 for Sanchez Computer Center. The FUTA tax ceiling is $7,000, and the SUTA tax ceiling is $7,000 in cumulative wages for each employee. The Sanchez Computer Center’s FUTA rate is 0.8% and the SUTA rate is 2.7%. The state reporting number is 025-025-2.
Hint: Sometimes the amount of Social Security taxes paid by the employee for the quarter will not equal the employee’s tax liability because of rounding. Any overage or difference should be reported on line 7a of Form 941.
2. You gathered the following data from time cards and individual employee earnings records. Your tasks are as follows:
a. On December 5, 201X, prepare a payroll register for this biweekly payroll.
b. Calculate the employer taxes of FICA OASDI, FICA Medicare, FUTA, and SUTA.
  
Allowance and
Cumulative Earnings
Biweekly   
Employee Marital Status
Before This Payroll
Salary Check No.
Department
Alvin, John S-3 $37,400 $1,510 30 Production Gale, Nicki S-1 47,500 2,040 31 Office Malone, Jeff S-2 64,800 2,080 32 Production Seaver, Paul S-1 4,600 810 33 Office
  
Assume the following:
a. FICA OASDI is 6.2% on $106,800; FICA Medicare is 1.45% on all earnings.
b. Federal income tax is calculated from Figure 24.
c. State income tax is 3% of gross pay.
d. Union dues are $18 biweekly.
e. The SUTA rate is 5.4%, and the FUTA rate is 0.8% on earnings below $7,000.
f. The proper Wage Bracket Table to use is Figure 7.2 on page 265 of your textbook.
  
3. The bookkeeper of Coast Co. gathered the following data from individual employee earnings records and daily time cards. Your task is to complete a payroll register on November 17.
  
  
Cumulative Allowance and Earning before Daily Time Hourly Rate Employee Marital Status This Payroll M T W T F of Pay FIT Ryan, Pam M-1 $6,400 9 10 6 5 5 $17 $39 Babu, Don S-0 17,500 8 7 12 11 3 13 66 Dean, Ria M-3 107,150 9 8 11 6 9 16 36 Gray, Jane S-1 21,000 8 10 6 9 7 20 99
  
  
Given the above, assume the following:
a. FICA OASDI is 6.2% on $106,800; FICA Medicare is 1.45% on all earnings.
b. Federal income tax has been calculated from a weekly table for you.
c. Each employee contributes $28 weekly for health insurance.
d. Overtime is paid at a rate of time and a half over 40 hours.
e. Ryan and Dean work in the office; the other employees work in sales.
  
4. At the end of the first quarter of 201X, you are asked to determine the FUTA tax liability for Ali Company. The FUTA tax rate is 0.8% on the first $7,000 each employee earns during the year
(assuming 13 weeks for the first quarter and each employee earned the same gross weekly pay for all 13 weeks).
  
Employee Gross Pay Per Week T. Bork $650 G. Jill 770 L. Steven 590 Q. Watson 420

Answer 1

Jounial Entuy for moutin of Nov, 201X Debit ) CrediLIS) Account Name Date 6800 D. Nw ax Accounta Recivable Ak 6800 To Service Revue Ak (Beng g number 126A8 bookfoe souileendeled. te Vita Needle Conypary) Accousta, Receivable Ak Dr. To Sevice Reuere AC 3900 Nov 3,201X 3900 (Being iusige number 1267% b for serwice reradeed te Acc Pac) 1400 Nov5 20x Fuiture Alc D To Accounto fayable A/C. 1400 (Being bendres puiehaaid from Systemidesign FUxnitued ). Novg2x Teliphene expeuaro.AL A To Accounto Poyable AlL (Being telephee biuo uciued) 150 150

ourct)Couditit) Accot Na Coos Alc Acucto leel ILGng a at ied Nev Co AIL fro TAcceto A le 450 Fax MalAj Te Ace s.fausblei . Multi Syetivd Genenal Ledge Accecucta kuivate AIC S00 800 Balaineald 3400 Na ouafvr19n Cagl Deci Balanu bd 900

ప IaBala bid Acounte Paysk AlL Sty Balauecid 450 hounl Fa Macd bate Balaue bld Meda Ne Colane.cd Balanee bld Tpluplua Exagug Al Dtonoton dAccounte fayabe 5o N Balanee éld N Balaucaild 50 Dau BalaneNd 150

Cao AlC Amt (5) bate Amt (E 1300 Deacripliau balauce cld Description Nou12, 2ou Accousti Recaivald 800 500 No, Accounta Recavable s20/x 1300 1300 1300 Deci,201x Balance bld Fax Maciner Alc Ambs) Dal Description 450 Amauite Deacuiption Accouuts foyable Dali 450 Nou30, Balaicn cld 20IX 201Y 450 450 Balase bld 450 Decl 2014 1-(b) Trial Balauaf Sauchuz Computer Centee uam th nmontle Novemberr, 201x. Particulays Accounto Receivable Service Remence Accounta Payable Fuxnitve Telephoue Expense Cash. Fax Machine Debit ($) Creditl$) 9400 10700 S. No. 1. 10:700 2,000 1400 150 1,300 450 TOTAL 12,700 12,700

Tany Freednhan payroll register 1 (a) Amount ($) Hourly wage for normal Hours Hourly wage for overtime hours 10 15 (1.5 time of regular wage ) Overtime is considered if working hours exceed 40 hours a week Income Tax on Gross Pay is 2% Gross Pay = Regular Hours * Pay Rate (regular)+ Overtime Hours* Pay Rate (Overtime) Payroll Register for the month of December 201X Net Pay (Gross Pay Regular Hours Overtime Hours Pay Rate (Regular) Pay Rate (Overtime) Gross Pay Income Tax @ 2% - Income Tax) Pay Date 12/7/201X 1Dec-7 Dec Name Lance Kumm Pay Period 380 372.4 38 10 7.6 Anthony Hall Total 40 2 10 15 430 8.6 421.4 810 16.2 793.8 Lance Kumm 245 12/14/201x 8Dec-14 Dec 250 25 10 |Anthony Hall Total 352.8 36 10 360 7.2 610 12.2 597.8 254.8 343 12/21/201X 15Dec-21 Dec Lance Kumm Anthony Hall Total 26 10 260 5.2 35 10 350 597.8 610 12.2

1 (b) Journal Entry for the month of December 201X Debit ($) Credit ($) Date Account Name |12/7/201X wage A/C Dr Income Tax A/C Dr 793.8 16.2 To Cash A/C 810 (Being wage paid to Lance Kumm and Anthony Hall for the week of Dec 1 201X to Dec 7, 201X) |12/14/201x Wage A/C Dr 597.8 Income Tax A/C Dr To Cash A/C (Being wage paid to Lance Kumm and Anthony Hall 12.2 610 for the week of Dec 8 201X to Dec 15, 201X) |12/21/201X wage A/C Dr Income Tax A/C Dr 597.8 12.2 To Cash A/C 610 (Being wage paid to Lance Kumm and Anthony Hall for the week of Dec 16 201X to Dec 21, 201X)

General Ledger A/C Wage A/C Amount ($) Date Description 12/7/201X Cash |12/14/201) Cash 12/21/201 Cash Amount ($) Date Description 793.8 12/31/201X Balance c/d 1989.4 597.8 597.8 1989.4 1989.4 1/1/201X Balance b/d 1989.4 Income Tax A/c Amount ($) Date Description |12/7/201X Cash |12/14/201) Cash 12/21/201 Cash Amount ($) Date Description 16.2 12/31/201X Balance c/d 40.6 12.2 12.2 40.6 40.6 1/1/201X Balance b/d 40.6 Cash A/C Description 12/7/201x Balance c/d Amount ($) Date 2030 12/7/201X |12/7/201X Amount ($) Date Description Wage Income Tax 12/14/201X Wage 12/14/201X Income Tax 12/21/201X Wage 12/21/201X Income Tax 793.8 16.2 597.8 12.2 597.8 12.2 2030 2030 1/1/201X Balance b/d 2030