Question

3-13 84 Employees' earnings using hourly and piece-rate methods The payroll records of Grove Machining Co. show the following information for the week ended April 17: Income Hours Production Tax Employee Classification Worked (Units) Rate W/held Manressa, C. Direct $18.00/hr $ 80 Dorr, M. Direct $17.60/hr Ginty, D. Direct 2,000 $.44/piece 110 Norris, D. Direct 1,800 $.44/piece Rancifer, K. Indirect $800/wk Greer, B. Indirect $1,600/wk Holbert, R. Indirect $1,400/wk 120 Hourly workers are paid time-and-a-half for overtime. a. Determine the net earnings of each employee. b. Prepare the journal entries for the following: 1. Recording the payroll. 2. Paying the payroll. 3. Distributing the payroll. (Assume that the overtime premium will be distributed to all jobs worked on during the period.) Recording the employer's payroll taxes. (Assume that none of the employees has achieved the maximum wage bases for FICA and unemployment taxes.) 240

Answer 1

A 1 Employee 2 Manressa C. 3 Dorr. M. 4 Ginty D. 5 Norris D. 6 Rancifer K. 7 Greer B. 8 Holbert R. B C D E F G H J K Rate Income FICA Classifica Hours Productio (Hr./Piece Overtime Overtime Gross tax Tax Net tion worked n (Units) /Week) hours pay Earnings withheld withheld Earnings Direct 42 181 21 27 774 80 59.21 634.789 Direct 48 17. 6 8 26.4 915.2 84 70.01 761.187 Direct 39| 2000 0.44 880 110 67.32 702.68 Direct 40 1800 0.44 792 100 60.59|631.412 Indirect 40 800 100 61.2 638.8 Indirect 50 1600 1600| 240 122.4 1237.6 Indirect 401 1400 1400 120 107.1 1172.9 800 9 10 Particulars 11 Salaries expense 12 FICA Tax payable 13 Federal Withholding payable 14 Net payroll payable 15 16 Net payroll payable 17 Cash Debit ($) Credit ($) 7161.2 547.83 834 5779.37 5779.37 5779.37