E10-4 (Algo) Recording Payroll Costs with and without Withholdings [LO 10-2] Assume an employee of Rocco...

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E10-4 (Algo) Recording Payroll Costs with and without Withholdings [LO 10-2] Assume an employee of Rocco Rock Company earns $3,300 of gross wages during the current pay period and is required to remit to the government $330 for income tax and $165 for FICA. Consider the following two procedures for paying the employee: Procedure 1 (Withholdings) Rocco Rock Company pays the employee net wages of $2,805 and will remit income taxes and FICA on behalf of the employee. Required: Procedure 2 (No Withholdings) Rocco Rock Company pays the employee gross wages of $3,300 and the employee is responsible for remitting income taxes and FICA himself. 1. Ignoring employer payroll taxes, under each procedure calculate (a) the total amount to be paid by the company and (b) the amoun of cash the employee will have after satisfying all responsibilities to the government. Do your answers for procedures 1 and 2 differ for (a)? For (b)? 2. Which approach does the government require? 3. Considering that employers are responsible for matching employees' FICA contributions, which procedure will employers prefer? 4. Prepare the journal entries required by the employer under procedure 1, assuming the employee is paid in cash, but the withholdings and matching employer FICA contribution have not yet been paid. (Do not ignore employer payroll taxes, but assume no unemployment taxes.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Ignoring employer payroll taxes, under each procedure calculate (a) the total amount to be paid by the company and (b) the amount of cash the employee will have after satisfying all responsibilities to the government. Do your answers for procedures 1 and 2 differ for (a)? For (b)? Procedure 1 (Withholdings) Procedure 2 (No Withholdings) Do your answers for Procedures 1 and 2 differ? Total Labor Cost Amount of Cash Required 1 Required 2 > Which approach does the government require? The government requires Considering that employers are responsible for matching employees' FICA contributions, which procedure will employers prefer? Employers will prefer Journal entry worksheet 1 2 Record the wages expense, including payroll deductions. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet 1 2 Record the payroll tax expense. Note: Enter debits before credits. Transaction 2 General Journal Debit Credit Record entry Clear entry View general journal E10-4 (Algo) Recording Payroll Costs with and without Withholdings [LO 10-2] Assume an employee of Rocco Rock Company earns $3,300 of gross wages during the current pay period and is required to remit to the government $330 for income tax and $165 for FICA. Consider the following two procedures for paying the employee: Procedure 1 (Withholdings) Rocco Rock Company pays the employee net wages of $2,805 and will remit income taxes and FICA on behalf of the employee. Required: Procedure 2 (No Withholdings) Rocco Rock Company pays the employee gross wages of $3,300 and the employee is responsible for remitting income taxes and FICA himself. 1. Ignoring employer payroll taxes, under each procedure calculate (a) the total amount to be paid by the company and (b) the amoun of cash the employee will have after satisfying all responsibilities to the government. Do your answers for procedures 1 and 2 differ for (a)? For (b)? 2. Which approach does the government require? 3. Considering that employers are responsible for matching employees' FICA contributions, which procedure will employers prefer? 4. Prepare the journal entries required by the employer under procedure 1, assuming the employee is paid in cash, but the withholdings and matching employer FICA contribution have not yet been paid. (Do not ignore employer payroll taxes, but assume no unemployment taxes.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Ignoring employer payroll taxes, under each procedure calculate (a) the total amount to be paid by the company and (b) the amount of cash the employee will have after satisfying all responsibilities to the government. Do your answers for procedures 1 and 2 differ for (a)? For (b)? Procedure 1 (Withholdings) Procedure 2 (No Withholdings) Do your answers for Procedures 1 and 2 differ? Total Labor Cost Amount of Cash Required 1 Required 2 > Which approach does the government require? The government requires Considering that employers are responsible for matching employees' FICA contributions, which procedure will employers prefer? Employers will prefer Journal entry worksheet 1 2 Record the wages expense, including payroll deductions. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet 1 2 Record the payroll tax expense. Note: Enter debits before credits. Transaction 2 General Journal Debit Credit Record entry Clear entry View general journal