Question

The following information is available for the employees of Webber Packing Company for the first week of January Year 1:

Kayla earns $27 per hour and 1½ times her regular rate for hours over 39 per week. Kayla worked 47 hours the first week in January. Kayla’s federal income tax withholding is equal to 11 percent of her gross pay. Webber pays medical insurance of $70 per week for Kayla and contributes $48 per week to a retirement plan for her.

Paula earns a weekly salary of $1,050. Paula’s federal income tax withholding is 20 percent of her gross pay. Webber pays medical insurance of $135 per week for Paula and contributes $115 per week to a retirement plan for her. Vacation pay is accrued at the rate of 2 hours per week (based on the regular pay rate) for Kayla and $80 per week for Paula.

Assume the Social Security tax rate is 6.0 percent on the first $110,000 of salaries and the Medicare tax rate is 1.5 percent of total salaries. The state unemployment tax rate is 5.4 percent and the federal unemployment tax rate is 0.6 percent of the first $7,000 of salary for each employee.

c. Prepare the journal entry to record the payment of the payroll for the week. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your answers to 2 decimal places.)

d. Prepare the journal entry to record the payroll tax expense and fringe benefit expense for Webber Packing Company for the week. (Round your answers to 2 decimal places.)

**the homework does not provide questions a and b.

Thank you

Answer 1

First, we will figure out the Employee payroll sheets.

Employee Name	Working Hours	Normal working hours	Overtime	Hour rate normal	OT rate	Total payment	Withholding taxes	Social security	Mediclaim insurance	Net Payment
Kayla	47.00	39.00	8.00	27.00	40.50	1377	151.47	82.62	20.66	1,122.26
Paula						1050	210	63	15.75	761.25
						2,427	361	146	36	1,884
S.NO	Particulars		Amount (DR)	Amount (CR)
1	Salary Account		2,427.00
	To Salary payable Account			1,883.51
	To Withholding taxes			361.47	(Refer above calculation)
	To Social secuirty			145.62	(Refer above calculation)
	To Mediclaim insurance			36.41	(Refer above calculation)
	(Being provision made for the salary payable account)
2	Salary Payable account		1,883.51
	To Bank Account			1,883.51
	(Being payment made for the salary payment outstanding)
3	Vacation pay expenses account		134.00
	To Vacation provision payable account			134.00
	(27*2+80)
	(Being provision has been created for the vacation pay)
4
	Salary account (Employee benefit expenses)		659.24
	To Social security account			145.62
	To Mediclaim insurance			205.00
	To Provision for employee retirement			163.00
	To State unemployment tax rate			131.06
	To Federal unemployment tax rate			14.56
	(Being provision created on the part of the employer)