Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

Kakarot Co. began business on January 2. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax,

image text in transcribed
Kakarot Co. began business on January 2. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal income tax were withheld in the required amounts. An employee who is hired in the middle of the month receives half the monthly salary for that month. All required payroll tax reports were filed, and the correct amount of payroll taxes was remitted by the company for the calendar year. Early in the following year, before the Wage and Tax Statements (Form W-2) could be prepared for distribution to employees and for filing with the Social Security Administration, the employees' earnings records were inadvertently destroyed. None of the employees resigned or were discharged during the year, and there were no changes in salary rates. The social security tax was withheld at the rate of 6.0% and Medicare tax at the rate of 1.5% on salary. Data on dates of employment, salary rates, and employees' income taxes withheld, which are summarized as follows, were obtained from personnel records and payroll records: Employee Date First Employed Monthly Salary Arnell Blossom Ikumi Joel Reimu Rita Vega Nov. 16 Jan. 2 Oct. 1 Dec. 1 Feb. 1 Mar. 1 Nov. 16 $5,000 4,500 8,000 6,000 10,500 11,000 5,200 Monthly Income Tax Withheld $955 844 1,592 1,080 2,350 2,600 876 Instructions 1. Compute the amounts to be reported for the year on each employee's Wage and Tax Statement (Form W-2), arranging the data as follows (round to the nearest cent) Employee Gross Earnings Federal Income Social Security Tax Medicare Tax Tax Withheld Withheld Withheld 2. Compute the following employer payroll taxes for the year: 1) social security, (ii) Medicare, (ii) state unemployment compensation at 5.4% on the first $10,000 of each employee's earnings, (iv) federal unemployment compensation at 0.8% on the first $10,000 of each employee's earnings, (v) total

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

12th Edition

9780073526706

Students also viewed these Accounting questions