Wage and Tax Statement Data and Employer FICA Tax

Diamond Industries, Inc., began business on January 2, 2011. 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 2012, 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 monthly income tax withheld

Beltran Jan 1 4,300 681

Jeter April 16 11,000 2,508

Lee Aug 1 7,800 1,612

Rodriguez Nov16 3,000 356

Santana March 1 6,120 1,145

Ramirez May 16 3,840 566

Ordonez Dec 1 4,000 606

Round all answers to nearest whole cent. Enter all amounts as positive numbers.

1. Calculate the amounts to be reported on each employee's Wage and Tax Statement (Form W-2) for 2011.

Calculate for each employee: Gross Earnings/ Federal Income Tax Withheld/ Social Security Tax Withheld/ Medicare Tax Withheld

Beltran

Jeter

Lee

Rodriguez

Santana

Ramirez

Ordonez

2. Calculate the following employer payroll taxes for the year:

a Social security

b Medicare

c State unemployment compensation at 4.4% on the first $9,000 of each employee's earnings;

d Federal unemployment compensation at 0.8% on the first $9,000 of each employee's earnings

e Total

(a)

(b)

(c)

(d)

(e)

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