Demonstration Problem 8 General Ledger

Carole Vohsen operates a pet grooming salon called Canine Coiffures. She has five employees, all of whom are paid on a weekly basis. Canine Coiffures uses a payroll register, individuals employee earnings records, a journal, and a general ledger. The payroll data for each employee for the week ended January 21, 20--, are given below. Employees are paid 1 times the regular rate for work over 40 hours a week.

Name: /; Employee No. /; No. of Allowances /; Marital Status /;Total Hours worked Jan. 15-21 /;Rate /; Total Earnings Jan. 1-14

DeNourie, Katie; 1; 2; S; 44hr; $11.50; $1,058.00 Garriott, Pete; 2; 1; M; 40hr; $12.00; $1,032.00 Martinez, Sheila; 3; 3; M; 39hr; $12.50; $987.50 Parker, Nancy; 4; 4; M; 42hr; $11.00; $957.00 Shapiro, John; 5; 2; S, 40hr; $11.50; $931.50

Sheila Martinez is the manager of the shampooing Department. Her social security number is 500-88-4189, and she was born April 12, 1969. She lives at 46 Darling crossing, Norwich, CT, 06360. Martinez was hired September 1 of last year. Canine Coiffures uses a federal income tax withholding table. A portion of this weekly table is provided in figure 8-4 on pages 288 and 289. Social security tax is withheld at the rate of 6.2% on the first $110,100 earned. Medicare tax is withheld at the rate of 1.45%, and city earnings tax at the rate of 1%, both applied to gross pay. Garriott and Parker each have $14 and DeNourie and Martinez each have $4 withheld for health insurance. DeNourie, Martinez, and Shapiro each have $15 withheld to be invested in the groomers credit union. Garriott and Shapiro each have $18.75 withheld under a savings bond purchase plan.

Canine Coiffures payroll is met by drawing checks on its regular bank account. This week, the checks were issued in sequence, beginning with No. 811.

Required:

1. Prepare a payroll register for canine coiffures for the week end January 21, 20--. (In the Taxable Earnings/Unemployment Compensation column, enter the same amounts as in the Social Security Column.) Total the amounts columns, verify the totals, and rule with single and double lines.

2. Prepare an employee earning record for Sheila Martinez for the week ended January 21, 20--.

3. Assuming that the wages for week ended January 21 were paid on January 23, prepare the journal entry for the payment of this payroll.

4. Post the entry in requirement (3) to the affected accounts in the ledger of Canine Coiffures. Do not enter any amounts in the balance columns. Use account numbers as follows: Cash-101; Employee Federal Income Tax Payable-211; Social Security Tax payable-212; Medicare Tax Payable-213; City Earnings Tax Payable-217; Health Insurance Premiums Payable-216; Credit Union Payable,217; Savings Bond Deductions Payable-218; Wages and Salaries Expense-511.