Question

Payroll with Multiple Employees Information for Saunders Adventures Inc.'s monthly payroll is listed below. 6.209 1.45% Social Security tax rate Medicare tax rate Federal unemployment tax rate (FUTA) State unemployment tax rate (SUTA) 0.80% 9.40% Assume that no employee has cumulative wages that exceed the relevant wage bases. Additional Benefits Include: • Health Insurance: The company pays 80% of medical insurance premiums for all employees. Total cost is $500 per month per employee. Retirement: Saunders Adventures Inc. offers its employees the option of contributing up to 6% of their salaries to a voluntary retirement plan, with the employer matching their contribution • Free Skiing: Saunders Adventures Inc. offers its employees free skiing on days off. • Donations to the United Way: Saunders Adventures Inc. collects employee contributions and sends them to the United Way periodically, Information about each employee is included below: Hours Worked Wage Rate Withholding Withholding 160 160 Phoebe Ross Rachel Monica 12.00 14.00 12.00 18.00 200 420 160 19. Calculate total gross pay and total net pay for each employee 20. Prepare the journal entry for Saunders Adventures Inc. to record the cost of the salaries and benefits

Answer 1

19) Gross and Net Pay:
Employee	Phoebe	Ross	Rachel	Monica	Total
Hours Worked	160	160	200	160
Wage rate	12	14	12	18
Gross Pay	1920	2240	2400	2880	9440
Less:Deductions:
Fed tax withheld	320	360	420	460	1560
State tax withheld	60	80	110	150	400
Social Security tax withheld	119.04	138.88	148.8	178.56	585.28
Medicare Tax withheld	27.84	32.48	34.8	41.76	136.88
Retirement contri	115.2	134.4	144	172.8	566.4
Total withhelds	642.08	745.76	857.6	1003.12	3248.56
Net Pay	1277.92	1494.24	1542.4	1876.88	6191.44
20) Employer's Gross Payroll Expenses:
Gross pay	1920	2240	2400	2880	9440
Add:Payroll employer taxes:
Social Security tax withheld	119.04	138.88	148.8	178.56	585.28
Medicare Tax withheld	27.84	32.48	34.8	41.76	136.88
FUTA	15.36	17.92	19.2	23.04	75.52
SUTA	103.68	120.96	129.6	155.52	509.76
Retirement contri.	115.2	134.4	144	172.8	566.4
Health Insurance	500	500	500	500	2000
Total Payroll Exp.	2801.12	3184.64	3376.4	3951.68	13313.84
Journal Entry:
Accounts Title	Debit $	Credit $
Salaries expense	9440
Fed Taxes withheld &payable		1560
State Taxes withheld & payable		400
Social security tax payable		585.28
Medicare tax payable		136.88
Retirement contri. Payable		566.4
Cash		6191.44
(salary expense and net cash payment recorded)
Payroll taxes expense	3873.84
Social security tax payable		585.28
Medicare tax payable		136.88
FUTA payable		75.52
SUTA payable		509.76
Retirement contri. Payable		566.4
Health Insurance payable		2000
(Payroll expense & benefits of employer recorded)