8A-3. The following is the monthly payroll for the last 3 months of the year for Smith's Sporting Goods Shop, 2 Boat Road, Lynn, MA 01945. The shop is a sole proprietorship owned and operated by Bill Smith. The EIN for Smith's Sporting Goods Shop is 28-9311893. The employees at Smith's are paid once each month on the last day of the month. Paula Bush is the only employee who has contributed the maximum into Social Security. None of the other employees will reach the Social Security wage base limit by the end of the year. Assume the rate for Social Security to be 6.2% with a wage base maximum of $127,200 and the rate for Medicare to be 1.45% on all earnings. Smith's is classified as a iionthly depositor for Form 941 payroll tax deposit purposes.

1. Compute the December OASDI tax for Paula Bush. 2. Journalize the entries to record the employer's payroll tax expense for each period in the general journal. JTA rate: 5.7%; FUTA rate: 0.6% .

3. Journalize the payment of each tax liability in the general journal.

4. Complete Form 941 for the fourth quarter of the current year.

OCTOBER Employee Paula Bush Joe Lapine Harley Shaw FICA Monthly Earnings YTD Earnings OASDI Medicare Federal Income Tax $ 2,900 $120.750 $179.80 $ 42.05 $ 527.00 3,580 39,450 221.96 51.91 431.00 3,740 44,200 231.88 54.23 537.00 $10,220 $204,400 $633.64 $148.19 $1,495.00 NOVEMBER Employee Paula Bush Joe Lapine Harley Shaw Monthly Earnings YTD Earnings $ 3,060 $123,810 3,780 43,230 3,840 48,040 $10,680 $215,080 FICA OASDI Medicare Federal Income Tax $189.72 $ 44.37 $ 595.00 234.36 54.81 470.00 238.08 55.68 562.00 $662.16 $154.86 $1,627.00 December Employee Paula Bush Joe Lapine Harley Shaw Monthly Earnings YTD Earnings $ 4,240 $128,050 3,720 46,950 4,440 52,480 $12,400 $227,480 FICA OASDI Medicare Federal Income Tax $210.18 $ 61.48 $ 870.00 230.64 53.94 474.00 275.28 64.38 700.00 $716.10 $179.80 $2,044,00 OCTOBER Employee Paula Bush Joe Lapine Harley Shaw FICA Monthly Earnings YTD Earnings OASDI Medicare Federal Income Tax $ 2,900 $120.750 $179.80 $ 42.05 $ 527.00 3,580 39,450 221.96 51.91 431.00 3,740 44,200 231.88 54.23 537.00 $10,220 $204,400 $633.64 $148.19 $1,495.00 NOVEMBER Employee Paula Bush Joe Lapine Harley Shaw Monthly Earnings YTD Earnings $ 3,060 $123,810 3,780 43,230 3,840 48,040 $10,680 $215,080 FICA OASDI Medicare Federal Income Tax $189.72 $ 44.37 $ 595.00 234.36 54.81 470.00 238.08 55.68 562.00 $662.16 $154.86 $1,627.00 December Employee Paula Bush Joe Lapine Harley Shaw Monthly Earnings YTD Earnings $ 4,240 $128,050 3,720 46,950 4,440 52,480 $12,400 $227,480 FICA OASDI Medicare Federal Income Tax $210.18 $ 61.48 $ 870.00 230.64 53.94 474.00 275.28 64.38 700.00 $716.10 $179.80 $2,044,00