Question

Stark Company has five employees. Employees paid by the hour earn $11 per hour for the regular 40-hour workweek and $16 per hour beyond the 40 hours per week. Hourly employees are paid every two weeks, but salaried employees are paid monthly on the last biweekly payday of each month. FICA Social Security taxes are 6.2% of the first $128.400 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7000 paid to each employee. The company has a benefits plan that includes medical insurance, life insurance, and retirement funding for employees. Under this plan, employees must contribute 5% of their gross income as a payroll withholding, which the company matches with double the amount. Following is the partially completed payroll register for the biweekly period ending August 31, which is the last payday of August. a. Complete this payroll register by filling in all cells for the pay period ended August 31 b,c,d & e. Prepare the August 31 journal entry to: b. Record the accrued biweekly payroll and related liabilities for deductions. c. Record the employer's cash payment of the net payroll of part b. d. Record the employer's payroll taxes including the contribution to the benefits plan. e. Pay all liabilities (except for the net payroll in part c) for this biweekly period. Complete this question by entering your answers in the tabs below. Deferences ReA Reg to Complete this payroll register by filling in all cells for the pay period ended August 31. (Round your answers to decimal places) FICA Current Period Gross Pay withholding FUTA FICAS Employee Cumulative Pay Employee Excludes Current Period Employee Plan Withholding Medicare Employee FICA Employee Net Pay Pay Pay Type Hours CrossPay SUTA FICASS Employer Medicare Employer Plan Employer Expense $ 127.750.00 Salary 700000 Witold $ 250.00 800.00 150.00 6150 00 Stary

Can you please show how you found the last 5 columns of the first spreadsheet. thank you.

Answer 1

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Solution: a) FUTA and SUTA = Lower of (Gross pay x 0.6% or 5.4%) or (7000-Cumm pay)*0.6% and 5.4%. IF Cumm pay is greater than $7,000 then $0 FICA ($40.30) = (128400-127750)*6.2% FUTA FICA SS Emp. FICA Med Emp. Emp. Plan Employee Employee Cumm. Pay Pay type Hours Gross pay FIT/SIT SUTA FICA SS Empr. FICA Med Empr. Empr. Plan Net Pay Kathleen 127750 Salary $ 7,000.00 $3,250.00 $ - $ 40.30 $ 101.50 $ 350.00 $2,458.20 $ 800.00 $ - $ 40.30 $ 101.50 $ 700.00 Anthony $ 6,150 Salary $ 1,550.00 $ 130.00 $ 5.10 $ 96.10 $ 22.48 $ 77.50 $1,178.93 $ 45.00 $ 45.90 $ 96.10 $ 22.48 $ 155.00 Nochole $ 17,600 Regular 80 $ 880.00 $ 160.00 $ - $ 65.47 $ 15.31 $ 52.80 $ 712.42 Overtime 11' $ 176.00 $ 50.00 $ - $ 65.47 $ 15.31 $ 105.60 Zoey $ 6,650 Regular 80 $ 880.00 $ 150.00 $ 2.10 $ 61.50 $ 14.38 $ 49.60 $ 669.51 Overtime 7' $ 112.00 $ 47.00 $ 18.90 $ 61.50 $ 14.38 $ 99.20 Gracie $ 5,200 Regular 73 $ 803.00 $140.00 $ 4.82 $ 49.79 $ 11.64 $ 40.15 $ 515.42 Overtime $ 46.00 $ 43.36 $ 49.79 $ 11.64 $ 80.30 Total 163350 $ 11,401.00 $3,830.00 $ 12.02 $ 313.16 $ 165.31 $ 570.05 $5,534.47 $ 988.00 $ 108.16 $ 313.16 $ 165.31 $ 1,140.10 b) Credit Debit $ 11,401.00 Format and Naming convention is not available, can be slightly different: Journal Entries Date Account title and explaination Aug.31 Salaries (or wages) expense Employee Federal Income tax Payable Employee State Income tax Payable FICA Social sec. taxes Payable FICA Medicare taxes Payable Employee benefits plan payable Salaries (or wages) Payable (To record the payroll and related liabilities) Aug.31 Salaries (or wages) Payable Cash (To record the payment of salaries) 3,830.00 988.00 313.16 165.31 570.05 5,534.47 c) $ 5,534.47 : 5,534.47

Credit Date Aug.31 Debit $ 598.66 d) $ 313.16 $ 165.31 $ 12.02 $ 108.16 Aug.31 $1,140.10 $1,140.10 Account title and explaination Payroll tax Expense, plug FICA Social sec. taxes Payable FICA Medicare taxes Payable FUTA Payable SUTA Payable (To record the employer payroll tax expense) Employer benefit Expense Employee benefits plan payable (To record the employee benefit plan expense) Employee Federal Income tax Payable Employee State Income tax Payable FICA Social sec. taxes Payable FICA Medicare taxes Payable Employee benefits plan payable FUTA Payable SUTA Payable Cash (To record the payment of all liabilities) e) Aug.31 $3,830.00 $ 988.00 $ 626.32 $ 330.63 $1,710.15 $ 12.02 $ 108.16 $ 7,605.28