Wages and tax statements data on employer FICA tax

Ehrlich Co. began business on January 2, 20Y8,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 20Y9, before the wages 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%. Data on dates of employment , salary rates, and employees income taxes withheld, which are summarized as follows, were obtained from personal records and payroll records.

Employee Date first Employed Monthly Salary Monthly Income Tax Withheld

Arnett Nov 16 $ 5,500 $ 944

Cruz Jan 2 4,800 833

Edwards Oct 1 8,000 1,592

Harvin Dec 1 6,000 1,070

Nicks Feb 1 10,000 2,350

Shiancoe Mar 1 11,600 2,600

Ward Nov 16 5,220 876

Question 1

(a) Calculate the amounts to be reported on each employees Wage and Tax Statement(Form W-2) for 20Y8, arranging the data in the following form.

Employee, Gross Earnings, Federal Income Tax Withheld, Social Tax Withheld, Medicare Tax Withheld,

(b) Calculate the following employee payroll taxes for the year; (1) Social security, (2) Medicare,(3) state unemployment compensation at 5.4% on the first $10,000 of each employees earnings;( 4) Federal unemployment compensation at 0.6% on the first $10,000 of each employees earnings; (5) Total.