From the text: Cost Accounting (17th Edition) by Edward J. Vanderbeck and Maria R. Mitchell

Problem 3-8 (page 172-173) Payroll work sheet and journal entries

The payroll records of Graham Computer Co. for the week ending October 7, the 40^th week in the year, show the following:

Employee Name	Classification	Salary or the Wage per 40-Hour Week	Hours Worked	Income Tax Withheld	Gross Earnings through 39th Week
Allen	President	$ 2,489.00	40	$ 488.00	$ 123,560.00
Devine	Vice President -Administration	$ 2,338.00	40	$ 402.00	$ 119,500.00
Fiorelli	Supervisor - Production	$ 700.00	40	$ 180.00	$ 27,300.00
O'Clock	Factory- Direct	$ 500.00	48	$ 150.00	$ 19,820.00
O'Reilly	Factory- Direct	$ 400.00	46	$ 160.00	$ 17,200.00
Pawlukiewicx	Factory- Direct	$ 400.00	44	$ 110.00	$ 16,600.00
Surdick	Factory- Direct	$ 380.00	42	$ 120.00	$ 15,200.00
Trebbi	Factory- indirect	$ 300.00	42	$ 80.00	$ 7,800.00
Webb	Factory- indirect	$ 300.00	42	$ 80.00	$ 6,600.00

Required:

Complete a work sheet with the following column headings:

Employee

3 columns for Earnings for Week:

Use one for Regular Pay.

Use one for Overtime Premium Pay. (The company pays time-and-a-half for overtime for all employees below the supervisory level.)

Use one for Total for Week.

Total Earnings through 40^th Week.

FICA Taxable Earnings

FICA

Income Tax Withheld

Net Earnings

Prepare journal entries for the following:

Payroll for the 40^th week.

Payment of payroll for the week.

Distribution of the payroll costs, assuming that overtime premium is charged to all jobs worked during the period.

Employers payroll tax liability.

The company carries a disability insurance policy for employees at a cost of $15 per employee. Journalize the employers cost of insurance premiums for the week.