An employee earns $50 per hour and 2 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 50 hours during the week

An employee earns $50 per hour and 2 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 50 hours during the week. Assume further that the social security tax rate was 6.0%, the Medicare tax rate was 1.5%, and federal income tax to be withheld was $686.

a. Determine the gross pay for the week.
b. Determine the net pay for the week.


Answer:











a. Regular pay (40 hrs. × $50)…………………………………………… $2,000
Overtime pay (10 hrs. × $100)………………………………………… 1,000
Gross pay……………………………………………………………… $3,000
b. Gross pay……………………………………………………………… $3,000
Less: Social security tax (6% × $3,000)…………………………… $180
Medicare tax (1.5% × $3,000)……………………………… 45
Federal withholding………………………………………… 686 911
Net pay…………………………………………………………………… $2,089

The following data for Throwback Industries Inc. relate to the payroll for the week ended December 7, 2014:

The following data for Throwback Industries Inc. relate to the payroll for the week ended December 7, 2014:
















Employee
Hours
Worked
Hourly
Rate
Weekly
Salary
Federal
Income Tax
U.S. Savings
Bonds
Aaron 46 $68.00 $766.36 $100
Cobb 41 62.00 553.20 110
Clemente 48 70.00 691.60 120
DiMaggio 35 56.00 411.60 0
Griffey, Jr. 45 62.00 618.45 130
Mantle $1,800 432.00 120
Robinson 36 54.00 291.60 130
Williams 2,000 440.00 125
Vaughn 42 62.00 533.20 50



Employees Mantle and Williams are office staff, and all of the other employees are sales personnel. All sales personnel are paid 1½ times the regular rate for all hours in excess of 40 hours per week. The social security tax rate is 6.0%, and Medicare tax is 1.5% of each employee’s annual earnings. The next payroll check to be used is No. 901.



Instructions
1. Prepare a payroll register for Throwback Industries Inc. for the week ended December 7, 2014. Use the following columns for the payroll register: Employee, Total Hours, Regular Earnings, Overtime Earnings, Total Earnings, Social Security Tax, Medicare Tax, Federal Income Tax, U.S. Savings Bonds, Total Deductions, Net Pay, Ck. No., Sales Salaries Expense, and Office Salaries Expense.

2. Journalize the entry to record the payroll for the week.


Answer:















1. PAYROLL FOR WEEK ENDING December 7, 2014
Employee
Total
Hours
EARNINGS DEDUCTIONS PAID ACCOUNT DEBITED
Regular Overtime Total
Social
Security
Tax
Medicare
Tax
Federal
Income
Tax
U.S.
Savings
Bonds Total
Net
Pay
Ck.
No.
Sales
Salaries
Expense
Office
Salaries
Expense
Aaron 46 2,720.00 612.00 3,332.00 199.92 49.98 766.36 100.00 1,116.26 2,215.74 901 3,332.00
Cobb 41 2,480.00 93.00 2,573.00 154.38 38.60 553.20 110.00 856.18 1,716.82 902 2,573.00
Clemente 48 2,800.00 840.00 3,640.00 218.40 54.60 691.60 120.00 1,084.60 2,555.40 903 3,640.00
DiMaggio 35 1,960.00 1,960.00 117.60 29.40 411.60 558.60 1,401.40 904 1,960.00
Griffey, Jr. 45 2,480.00 465.00 2,945.00 176.70 44.18 618.45 130.00 969.33 1,975.67 905 2,945.00
Mantle 1,800.00 108.00 27.00 432.00 120.00 687.00 1,113.00 906 1,800.00
Robinson 36 1,944.00 1,944.00 116.64 29.16 291.60 130.00 567.40 1,376.60 907 1,944.00
Williams 2,000.00 120.00 30.00 440.00 125.00 715.00 1,285.00 908 2,000.00
Vaughn 42 2,480.00 186.00 2,666.00 159.96 39.99 533.20 50.00 783.15 1,882.85 909 2,666.00
16,864.00 2,196.00 22,860.00 1,371.60 342.91 4,738.01 885.00 7,337.52 15,522.48 19,060.00 3,800.00
2. Sales Salaries Expense 19,060.00
Office Salaries Expense 3,800.00
Social Security Tax Payable 1,371.60
Medicare Tax Payable 342.91
Employees Federal Income Tax Payable 4,738.01
Bond Deductions Payable 885.00
Salaries Payable 15,522.48

The following data for Flexco Inc. relate to the payroll for the week ended December 7, 2014

The following data for Flexco Inc. relate to the payroll for the week ended December 7, 2014:
















Employee
Hours
Worked
Hourly
Rate
Weekly
Salary
Federal
Income Tax
U.S. Savings
Bonds
Carlton 52 $50.00 $667.00 $ 60
Grove $4,000 860.00 100
Johnson 36 52.00 355.68 0
Koufax 45 58.00 578.55 44
Maddux 37 45.00 349.65 62
Seaver 3,200 768.00 120
Spahn 46 52.00 382.20 0
Winn 48 50.00 572.00 75
Young 43 54.00 480.60 80



Employees Grove and Seaver are office staff, and all of the other employees are sales personnel. All sales personnel are paid 1½ times the regular rate for all hours in excess of 40 hours per week. The social security tax rate is 6.0% of each employee’s annual earnings, and Medicare tax is 1.5% of each employee’s annual earnings. The next payroll check to be used is No. 328.

Instructions
1. Prepare a payroll register for Flexco Inc. for the week ended December 7, 2014. Use the following columns for the payroll register: Employee, Total Hours, Regular Earnings, Overtime Earnings, Total Earnings, Social Security Tax, Medicare Tax, Federal Income Tax, U.S. Savings Bonds, Total Deductions, Net Pay, Ck. No., Sales Salaries Expense, and Office Salaries Expense.

2. Journalize the entry to record the payroll for the week.


Answer:

1. PAYROLL FOR WEEK ENDING December 7, 2014
Employee
Total
Hours
EARNINGS DEDUCTIONS PAID ACCOUNT DEBITED
Regular Overtime Total
Social
Security
Tax
Medicare
Tax
Federal
Income
Tax
U.S.
Savings
Bonds Total
Net
Pay
Ck.
No.
Sales
Salaries
Expense
Office
Salaries
Expense
Carlton 52 2,000.00 900.00 2,900.00 174.00 43.50 667.00 60.00 944.50 1,955.50 328 2,900.00
Grove 4,000.00 240.00 60.00 860.00 100.00 1,260.00 2,740.00 329 4,000.00
Johnson 36 1,872.00 1,872.00 112.32 28.08 355.68 496.08 1,375.92 330 1,872.00
Koufax 45 2,320.00 435.00 2,755.00 165.30 41.33 578.55 44.00 829.18 1,925.82 331 2,755.00
Maddux 37 1,665.00 1,665.00 99.90 24.98 349.65 62.00 536.53 1,128.47 332 1,665.00
Seaver 3,200.00 192.00 48.00 768.00 120.00 1,128.00 2,072.00 333 3,200.00
Spahn 46 2,080.00 468.00 2,548.00 152.88 38.22 382.20 573.30 1,974.70 334 2,548.00
Winn 48 2,000.00 600.00 2,600.00 156.00 39.00 572.00 75.00 842.00 1,758.00 335 2,600.00
Young 43 2,160.00 243.00 2,403.00 144.18 36.05 480.60 80.00 740.83 1,662.17 336 2,403.00
14,097.00 2,646.00 23,943.00 1,436.58 359.16 5,013.68 541.00 7,350.42 16,592.58 16,743.00 7,200.00
2. Sales Salaries Expense 16,743.00
Office Salaries Expense 7,200.00
Social Security Tax Payable 1,436.58
Medicare Tax Payable 359.16
Employees Federal Income Tax Payable 5,013.68
Bond Deductions Payable 541.00
Salaries Payable 16,592.58