CHAPTER 11 Current Liabilities and Payroll
Prob. 11-3A
1. Gross Federal Income Social Security Medicare
Earnings* Tax Withheld Tax Withheld Tax Withheld
Arnett…………
…
$ 8,250.00 $ 1,416.00 $ 495.00 $ 123.75
Cruz……………
…
57,600.00 9,996.00 3,456.00 864.00
Edwards………
…
24,000.00 4,776.00 1,440.00 360.00
*The gross earnings are determined by multiplying the monthly earnings by the
number of months of employment based on the date of hire.
2. a. Social security tax paid by employer…………………………………
…
$19,780.80
b. Medicare tax paid by employer…………………………………………
…
4,945.20
c. Earnings subject to unemployment compensation tax,
$10,000 for all employees except Arnett, Harvin, and Ward.
Thus, total earnings subject to SUTA and FUTA are
$62,080 [(4 × $10,000) + $8,250 + $6,000 + $7,830].
…
Employee
CHAPTER 11 Current Liabilities and Payroll
Prob. 11-4A
1.
Social Federal Sales Office
Total Security Medicare Income Retirement Net Ck. Salaries Salaries
Employee Hours Regular Overtime Total Tax Tax Tax Savings Total Pay No. Expense Expense
Aaron 46 2,720.00 612.00 3,332.00 199.92 49.98 750.20 100.00 1,100.10 2,231.90 901 3,332.00
Cobb 41 2,480.00 93.00 2,573.00 154.38 38.60 537.68 110.00 840.66 1,732.34 902 2,573.00
Clemente 48 2,800.00 840.00 3,640.00 218.40 54.60 832.64 120.00 1,225.64 2,414.36 903 3,640.00
DiMaggio 35 1,960.00 1,960.00 117.60 29.40 366.04 513.04 1,446.96 904 1,960.00
2. Sales Salaries Expense 19,060.00
Office Salaries Expense 3,800.00
Social Security Tax Payable 1,371.60
Medicare Tax Payable 342.91
PAYROLL FOR WEEK ENDING December 9, 20Y8
EARNINGS DEDUCTIONS PAID ACCOUNTS DEBITED
CHAPTER 11 Current Liabilities and Payroll
Prob. 11-5A
1. Dec. 2 Retirement Savings Deductions Payable 3,400
Cash 3,400
13 Operations Salaries Expense 43,200
Officers Salaries Expense 27,200
Office Salaries Expense 6,800
Social Security Tax Payable 4,632
Medicare Tax Payable 1,158
Employees Federal Income Tax Payable 15,440
Employees State Income Tax Payable 3,474
Retirement Savings Deductions Payable 1,700
Medical Insurance Payable 4,500
Salaries Payable 46,296
13 Payroll Tax Expense 6,265
Social Security Tax Payable 4,632
Medicare Tax Payable 1,158
State Unemployment Tax Payable 350
Federal Unemployment Tax Payable 125
CHAPTER 11 Current Liabilities and Payroll
Prob. 11-5A (Concluded)
Dec. 27 Operations Salaries Expense 42,800
Officers Salaries Expense 28,000
Office Salaries Expense 7,000
Salaries Payable 51,360
27 Salaries Payable 51,360
Cash 51,360
27 Payroll Tax Expense 6,135
Social Security Tax Payable 4,668
Medicare Tax Payable 1,167
State Unemployment Tax Payable 225
Federal Unemployment Tax Payable 75
31 Pension Expense 60,000
Cash 45,000
Unfunded Pension Liability 15,000
2. a. Dec. 31 Operations Salaries Expense 8,560
Officers Salaries Expense 5,600
Office Salaries Expense 1,400
Salaries Payable 15,560
CHAPTER 11 Current Liabilities and Payroll
Prob. 11-1B
1. Apr. 15 Cash 225,000
Notes Payable 225,000
July 14 Notes Payable 225,000
Interest Expense ($225,000 × 8% × 60 ÷ 360) 3,000
Cash 228,000
Aug. 16 Merchandise Inventory 90,000
Accounts Payable—Exige Co. 90,000
Sept. 15 Accounts Payable—Exige Co. 90,000
Notes Payable 90,000
Oct. 28 Notes Payable 320,000
Cash 320,000
30 Notes Payable 90,000
Interest Expense ($90,000 × 6% × 45 ÷ 360) 675
Cash 90,675
28 Litigation Loss 87,500
Litigation Claims Payable 87,500
CHAPTER 11 Current Liabilities and Payroll
Prob. 11-1B (Concluded)
2. a. Product Warranty Expense 26,800
Product Warranty Payable 26,800
CHAPTER 11 Current Liabilities and Payroll
Prob. 11-2B
1. a. Dec. 30 Sales Salaries Expense 625,000
Warehouse Salaries Expense 240,000
Office Salaries Expense 320,000
Employees Federal Income Tax Payable 232,260
Social Securit
y
Tax Pa
y
able171,100
1$1,185,000 × 6%
2$1,185,000 × 1.5%
b. Dec. 30 Payroll Tax Expense 90,675
Social Security Tax Payable 71,100
p
y
y
p
y
y
3$30,000 × 5.4%
4$30,000 × 0.6%
2. a. Dec. 30 Sales Salaries Expense 625,000
Warehouse Salaries Expense 240,000
Office Salaries Expense 320,000
Employees Federal Income Tax Payable 232,260
Social Securit
y
Tax Pa
y
able171,100
1$1,185,000 × 6%
2$1,185,000 × 1.5%
b. Jan. 4 Payroll Tax Expense 159,975
Social Security Tax Payable 71,100
Medicare Tax Payable 17,775
State Unem
p
lo
y
ment Tax Pa
y
able363,990
Federal Unem
p
lo
y
ment Tax Pa
y
able47,110
CHAPTER 11 Current Liabilities and Payroll
Prob. 11-3B
1. Gross Federal Income Social Security Medicare
Earnings* Tax Withheld Tax Withheld Tax Withheld
Addai………………
…
$44,880 $ 9,372 $ 2,692.80 $ 673.20
Kasay………………
…
25,200 3,731 1,512.00 378.00
*The gross earnings are determined by multiplying the monthly earnings by the
number of months of employment based on the date of hire.
2. a. Social security tax paid by employer………………………………
…
$17,163.90
b. Medicare tax paid by employer……………………………………
…
4,290.98
c. Earnings subject to unemployment compensation tax,
$10,000 for all employees except Stewart and Tolbert.
Thus, total earnings subject to SUTA and FUTA are
$59,375 [(5 × $10,000) + $4,500 + $4,875].
…
Employee
CHAPTER 11 Current Liabilities and Payroll
Prob. 11-4B
1.
Social Federal Sales Office
Total Security Medicare Income Retirement Net Ck. Salaries Salaries
Employee Hours Regular Overtime Total Tax Tax Tax Savings Total Pay No. Expense Expense
Carlton 52 2,000.00 900.00 2,900.00 174.00 43.50 667.00 60.00 944.50 1,955.50 328 2,900.00
Grove 4,000.00 240.00 60.00 860.00 100.00 1,260.00 2,740.00 329 4,000.00
Johnson 36 1,872.00 1,872.00 112.32 28.08 355.68 496.08 1,375.92 330 1,872.00
2. Sales Salaries Expense 16,743.00
Office Salaries Expense 7,200.00
Social Security Tax Payable 1,436.58
PAYROLL FOR WEEK ENDING December 9, 20Y8
EARNINGS DEDUCTIONS PAID ACCOUNTS DEBITED
1. Dec. 1 Medical Insurance Payable 2,520
Cash 2,520
2 Retirement Savings Deductions Payable 2,300
Cash 2,300
12 Sales Salaries Expense 14,500
Officers Salaries Expense 7,100
Office Salaries Expense 2,600
Social Security Tax Payable 1,452
12 Salaries Payable 15,418
Cash 15,418
12 Payroll Tax Expense 2,220
Social Security Tax Payable 1,452
Medicare Tax Payable 363
State Unemployment Tax Payable 315
Federal Unemployment Tax Payable 90
Cash 7,938
CHAPTER 11 Current Liabilities and Payroll
Prob. 11-5B (Concluded)
26 Sales Salaries Expense 14,250
Officers Salaries Expense 7,250
Office Salaries Expense 2,750
Social Security Tax Payable 1,455
Medicare Tax Payable 364
26 Salaries Payable 15,873
Cash 15,873
26 Payroll Tax Expense 2,009
Social Security Tax Payable 1,455
Medicare Tax Payable 364
State Unemployment Tax Payable 150
Federal Unemployment Tax Payable 40
30 Employees State Income Tax Payable 6,258
Cash 6,258
2. a. Dec. 31 Sales Salaries Expense 4,275
Officers Salaries Expense 2,175
Office Salaries Expense 825
Salaries Payable 7,275
Dec.