Problem 10.4A (Algo) Computing gross earnings, determining deductions and net amount due, Journalizing payroll transactions. LO 10-2, 10-3, 10-4, 10-5, 10-6, 10-7 MSquared pays its employees monthly. Payments made by the company on October 31 follow. Cumulative amounts for the year paid to the persons prior to the October 31 payroll are also given. 1. Tori Parker, president, gross monthly salary of $20,000; gross earnings prior to October 31, $171,300. 2. Carolyn Catz, vice president, gross monthly salary of $16,200; gross earnings paid prior to October 31, $152,300. 3. Michelle Clark, independent accountant who audits the company's accounts and performs consulting services, $16,100; gross amounts paid prior to October 31, $44,500. 4. Will Wu, treasurer, gross monthly salary of $5,600; gross earnings prior to October 31, $52,400. 5. Payment to Review Services for monthly services of Tom Bradley, an editorial expert, $5,600; amount paid to Review Services prior to October 31, $33,700. Required: 1. Use an earnings ceiling of $142,800 for social security taxes and a tax rate of 6.2 percent and a tax rate of 1.45 percent on all earnings for Medicare taxes. Prepare a schedule showing the following information: a. Each employee's cumulative earnings prior to October 31. b. Each employee's gross earnings for October. c. The amounts to be withheld for each payroll tax from each employee's earnings; the employee's income tax withholdings are Parker, $5,244; Catz, $4,556; Wu, $1,285. d. The net amount due each employee. e. The total gross earnings, the total of each payroll tax deduction, and the total net amount payable to employees. 2. Prepare the general journal entry to record the company's payroll on October 31. 3. Prepare the general journal entry to record payments to employees on October 31. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Use an earnings ceiling of $142,800 for social security taxes and a tax rate of 6.2 percent and a tax rate of 1.45 percent on all earnings for Medicare taxes. Prepare a schedule showing the following information: Note: Round your answers to 2 decimal places. Employee Name Cumulative earnings Monthly pay Social security Medicare Employee income tax withholding Net pay $ S Tori Parker 171,300.00 20,000.00 Carolyn Catz 152,300.00 16,200.00 1,004.40 x Michelle Clark 44,500.00 16,100.00 x 0.00 Will Wu 52,400.00 5,600.00 347.20 $1,240.00 $290.00 234.90 0.00 x 81.20 $ 5,244.00 $13,226.00 4,558.00 0.00 x 10,404.70 x 16,100.00 1,285.00 3,886.60 Tom Bradley 33,700.00 x 5,600.00 x 347.20 x 81.20 1.285.00 3,886.60 x $ S Totals $2,938.80 $ 687.30 $ 12,370.00 $47,503.90 454,200.00 63,500.00 Req 1 Req 2 and 3 > Req 1 Req 2 and 3 Prepare the general journal entries to record the company's payroll expenses and also payments to employees on October 31, 20X1. Note: Round your answers to 2 decimal places. No Date General Journal 1 October 31, 20X1 Salaries expense Social security tax payable Medicare tax payable Employee income tax payable 2 Salaries payable October 31, 20X1 Salaries payable Cash < Req 1 Req 2 and 3 > > Debit Credit 79,496.10 x 2,938.80x 687.30 x 12,370.00 x 63,500.00 79,496.10 x 79,496.10 x Journal entry worksheet < 1 Record the company's payroll to be paid at a later date. Note: Enter debits before credits. Date General Journal October 31, 20X1 Salaries expense Social security tax payable Medicare tax payable Employee income tax payable Salaries payable Debit 79,496.10 Credit 2,938.80 687.30 12,370.00 63,500.00 Record entry Clear entry View general journal Journal entry worksheet < 2 Record the entry to summarize payment of the payroll. Note: Enter debits before credits. Date October 31, 20X1 General Journal Debit Credit Salaries payable 79,498.10 Cash 79,496.10 Record entry Clear entry View general journal