Question
Karen Jolly operates a bakery called Karens Cupcakes. She has five employees, all of whom are paid on a weekly basis. Karens Cupcakes uses a
Karen Jolly operates a bakery called Karens Cupcakes. She has five employees, all of whom are paid on a weekly basis. Karens Cupcakes uses a payroll register, individual employee earnings records, and a general journal.
Karens Cupcakes uses a weekly federal income tax withholding table like the one in Figure 8-4 in the text. The payroll data for each employee for the week ended February 15, 20--, are given below. Employees are paid 1 times the regular rate for working over 40 hours a week.
No. of | Marital | Total Hours | Total Earnings | ||
---|---|---|---|---|---|
Name | Allowances | Status | Worked Feb. 915 | Rate | Jan. 1Feb. 8 |
Barone, William | 1 | S | 40 | $14.00 | $3,360.00 |
Hastings, Gene | 4 | M | 45 | 15.00 | 3,870.00 |
Nitobe, Isako | 3 | M | 46 | 12.00 | 3,168.00 |
Smith, Judy | 2 | M | 42 | 13.00 | 3,276.00 |
Tarshis, Dolores | 1 | S | 39 | 14.50 | 3,480.00 |
Social Security tax is withheld from the first $128,400 of earnings at the rate of 6.2%. Medicare tax is withheld at the rate of 1.45%, and city earnings tax at the rate of 1%, both applied to gross pay. Hastings and Smith have $35 withheld and Nitobe and Tarshis have $15 withheld for health insurance. Nitobe and Tarshis have $25 withheld to be invested in the bakers credit union. Hastings has $18.75 withheld and Smith has $43.75 withheld under a savings bond purchase plan.
Karens Cupcakes payroll is met by drawing checks on its regular bank account. The checks were issued in sequence, beginning with No. 365.
Required:
1. | Prepare a payroll register for Karens Cupcakes for the week ended February 15, 20--. (In the Taxable Earnings/Unemployment Compensation column, enter the same amounts as in the Social Security column.) Total the amount columns and verify the totals. |
2. | Assuming that the wages for the week ended February 15 were paid on February 17, prepare the journal entry for the payment of this payroll. |
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