Note: In this chapter and in all succeeding work throughout the course, unless instructed otherwise, calculate hourly rates and overtime rates as follows:

1.	Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the over-time rate).
2.	If the third decimal place is 5 or more, round to the next higher cent.
3.	If the third decimal place is less than 5, simply drop the third decimal place.
	Examples:	Monthly rate $1,827 Weekly rate ($1,827 12)/52 = $421.615 rounded to $421.62 Hourly rate $421.62/40 = $10.540 rounded to $10.54 O.T. rate $10.54 1.5 = $15.81

Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow.

Olney Company is a small manufacturing firm located in Allentown, Pennsylvania. The company has a workforce of both hourly and salaried employees. Each employee is paid for hours actually worked during each week, with the time worked being recorded in quarter-hour increments. The standard workweek consists of 40 hours, with all employees being paid time and one-half for any hours worked beyond the 40 regular hours.

Wages are paid every Friday, with one weeks pay being held back by the company. Thus, the first payday for Olney Company is January 14 for the workweek ending January 8 (Saturday).

The total deductions for employees' payroll is shown below.
OASDI	$597.68
HI	139.77
FIT	772.76
SIT	295.96
SUTA	6.76
CIT	128.19
Simple deductions	440.00
Group insurance	6.80
Health insurance	16.50
Total deductions	2,404.42

Below is the information provided from the payroll register of Olney Company, Inc.

OLNEY COMPANY, INC. Payroll Register
Time Card No.	Name	GRP. INS.		HEALTH INS.	CK. NO.	AMT.
11	Mangino, R.	$0.85		$1.65	313	$545.81
12	Flores, I.	0.85		1.65	314	718.97
13	Palmetto, C.			1.65	315	527.59
21	Waters, R.	0.85		1.65	316	785.16
22	Kroll, C.	0.85		1.65	317	711.12
31	Ruppert, C.	0.85		1.65	318	651.49
32	Scott, W.	0.85		1.65	319	606.96
33	Wickman, S.			1.65	320	572.14
51	Foley, L.	0.85		1.65	321	970.20
99	Olney, M.	0.85		1.65	322	1,145.94
	Totals	$6.80		$16.50		$7,235.38

a. Prepare the journal entries as of January 12 to record the payroll and the payroll taxes for the week ending January 8. Credit Salaries Payable for the total net pay.

Use the following tax rates and bases: employers FICAOASDI, 6.2% on the first $117,000; employers FICAHI, 1.45% on total earnings; FUTA, 0.6% on the first $7,000; and SUTA, 3.6785% on the first $8,500.

If an amount box does not require an entry, leave it blank. If required, round your answers to the nearest cent.

	Account	Debit	Credit
20-- Jan. 12
	To record payroll.
20-- Jan. 12
	To record payroll taxes.

b. Prepare the journal entry to record the payment of the payroll on January 14 when the paychecks are distributed to all workers. If required, round your answers to the nearest cent.

Date	Account	Debit	Credit
20-- Jan. 14