Question

Stark Company has five employees. Employees paid by the hour earn $14 per hour for the regular 40 hour workweek and $19 per hour beyond the 40 hours per week. Hourly employees are paid every two weeks, but salaried employees are paid monthly on the last biweekly payday of each month. FICA Social Security taxes are 6.2% of the first $128,400 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to each employee. The company has a benefits plan that includes medical insurance, life insurance, and retirement funding for employees. Under this plan, employees must contribute 5% of their gross income as a payroll withholding, which the company matches with double the amount. Following is the partially completed payroll register for the biweekly period ending August 31, which is the last payday of August. a. Complete this payroll register by filling in all cells for the pay period ended August 31, b, c, d & e. Prepare the August 31 journal entry to: b. Record the accrued biweekly payroll and related liabilities for deductions. c. Record the employer's cash payment of the net payroll of part b. d. Record the employer's payroll taxes including the contribution to the benefits plan. e. Pay all liabilities (except for the net payroll in part c) for this biweekly period.

Answer 1

a.

Employee	Cumulative Pay	Current Period Gross Pay			FIT Withholding	FUTA	FICA S.S. Employee	FICA Medicare Employee	Employee Plan Withholding	Employee Net Pay
		Pay Type	Pay Hours	Gross Pay	SIT Withholding	SUTA	FICA S.S. Employer	FICA Medicare Employer	Employer Plan Expense
Kathleen	127450.00	Salary		7000.00	3100.00	0.00	58.90	101.50	350.00	2649.60
					740.00	0.00	58.90	101.50	700.00
Anthony	6000.00	Salary		1520.00	124.00	6.00	94.24	22.04	76.00	1161.72
					42.00	54.00	94.24	22.04	152.00
Nichole	17300.00	Regular	80	1120.00	154.00	0.00	82.40	19.27	66.45	959.88
		Overtime	11	209.00	47.00	0.00	82.40	19.27	132.90
Zoey	6500.00	Regular	80	1120.00	144.00	3.00	77.69	18.17	62.65	906.50
		Overtime	7	133.00	44.00	27.00	77.69	18.17	125.30
Gracie	5050.00	Regular	70	980.00	134.00	5.88	60.76	14.21	49.00	679.03
		Overtime			43.00	52.92	60.76	14.21	98.00
Totals	162300.00			12082.00	3656.00	14.88	373.98	175.19	604.10	6356.73
					916.00	133.92	373.98	175.19	1208.20

No.	General Journal	Debit	Credit
b.	Salaries and wages expense	12082.00
	FIT withholding		3656.00
	SIT withholding		916.00
	FICA S.S. payable		373.98
	FICA Medicare payable		175.19
	Contribution to Benefits plan		604.10
	Salaries and wages payable		6356.73
	(To record the accrued biweekly payroll)
c.	Cash	6356.73
	Salaries and wages payable		6356.73
	(To record the payment of net payroll)
d.	Payroll tax expense	1906.17
	FUTA tax payable		14.88
	SUTA tax payable		133.92
	FICA S.S. payable		373.98
	FICA Medicare payable		175.19
	Contribution to Benefits plan		1208.20
	(To record the employer's payroll taxes)
e.	FUTA tax payable	14.88
	SUTA tax payable	133.92
	FICA S.S. payable	747.96
	FICA Medicare payable	350.38
	Contribution to Benefits plan	1812.30
	Cash		3059.44
	(To record the payment of liabilities)