Question

1. Payroll Accounting

   Jet Enterprises has the following data available for its April 30, 2019, payroll:

   Wages earned	$485,000	*
   Federal income taxes withheld	92,300

   * All subject to Social Security and Medicare matching and withholding of 6.2% and 1.45%, respectively.

   Federal unemployment taxes of 0.70% and state unemployment taxes of 0.90% are payable on $405,700 of the wages earned.

   Required:

   If required, round your answers to the nearest cent.

   1. Compute the amounts of taxes payable and the amount of wages that will be paid to employees. Enter amounts as positive numbers.

   Social Security	$
   Medicare	$
   Federal unemployment	$
   State unemployment	$
   Net pay	$

   Feedback

   Prepare the journal entries to record the wages earned and the payroll taxes. If an amount box does not require an entry, leave it blank.

   Apr. 30	Federal Income Taxes Withholding Payable Medicare Taxes Payable (Employee) Social Security Taxes Payable (Employee) Wages Expense Wages Payable
   	Federal Income Taxes Withholding Payable Interest Receivable Medicare Taxes Expense (Employer) State Unemployment Taxes Expense Wages Expense
   	Federal Unemployment Taxes Expense Interest Payable Social Security Taxes Expense (Employer) Social Security Taxes Payable (Employee) Wages Receivable
   	Federal Unemployment Taxes Expense Medicare Taxes Expense (Employer) Medicare Taxes Payable (Employee) State Unemployment Taxes Expense Wages Expense
   	Cash Interest Expense Social Security Taxes Expense (Employer) State Unemployment Taxes Expense Wages Expense
   	(Record wages and liabilities)
   Apr. 30	Federal Unemployment Taxes Expense Interest Expense Income Taxes Expense Medicare Taxes Payable (Employer) Social Security Taxes Payable (Employer)
   	Accounts Payable Medicare Taxes Payable (Employer) State Unemployment Taxes Expense State Unemployment Taxes Payable Social Security Taxes Payable (Employer)
   	Accounts Payable Interest Receivable Social Security Taxes Expense Social Security Taxes Payable Wages Payable
   	Cash Federal Income Taxes Withholding Payable Federal Unemployment Taxes Payable Medicare Taxes Expense Medicare Taxes Payable
   	Cash Federal Unemployment Taxes Expense Federal Unemployment Taxes Payable State Unemployment Taxes Expense Wages Expense
   	Accounts Receivable Federal Unemployment Taxes Expense Interest Payable State Unemployment Taxes Expense State Unemployment Taxes Payable
   	Federal Unemployment Taxes Expense Income Taxes Expense Social Security Taxes Expense (Employer) Social Security Taxes Payable (Employer) State Unemployment Taxes Expense
   	Federal Income Taxes Withholding Payable Federal Unemployment Taxes Expense Medicare Taxes Payable (Employer) Social Security Taxes Expense (Employer) Wages Expense
   	(Record employer payroll taxes)

   Feedback

   B) Conceptual Connection: Jet would like to hire a new employee at a salary of $65,000. Assuming payroll taxes are as described above (with unemployment taxes paid on the first $9,000) and fringe benefits (e.g., health insurance, retirement, etc.) are 25% of gross pay, what will be the total cost of this employee for Jet? Round your answer to two decimal places.
   $

2. Mason Auto Repair specializes in the repair of foreign car transmissions. To encourage business, Mason offers a 6-month warranty on all repairs. The following data are available for 2019:

   Transmissions repaired, 2019	3,100
   Expected frequency of warranty claims	0.03	per repair
   Actual warranty claims, 2019	$27,500
   Estimated warranty liability, 1/1/19	$21,900
   Estimated cost of each warranty claim	$270

   Assume that warranty claims are paid in cash.

   Required:

   B. Compute the warranty expense for 2019.
   $

   C. Prepare the entry to record the payment of the 2019 warranty claims.

   	(Record payment of claims)

   3. Conceptual Connection: What is the December 31, 2019, balance in the estimated warranty liability account?
   $

   Why has the balance in the estimated warranty liability account changed from January 1, 2019?

   The balance has because more claims were than were through warranty expense.

Answer 1

Solved Question 1 as per HOMEWORKLIB POLICY. Please post second one separately

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
Part 1	Social Security:	$485,000 × 0.062	=	$     30,070
	Medicare:	$485,000 × 0.0145	=	$        7,033
	Federal unemployment:	$405,700 × 0.007	=	$        2,840
	State unemployment:	$405,700 × 0.009	=	$        3,651
	Net pay = $485,000 – $92,300 – $30,070 – $7,032.50 = $355,597.50
Journal
Date	Account and Explanation	Debit	Credit
Apr 30	Wages Expense	$                485,000
	Federal Income Taxes Withholding Payable		$        92,300
	Social Security Taxes Payable (Employee)		$        30,070
	Medicare Taxes Payable (Employee)		$          7,033
	Cash		$      355,598
	(Record wages and liabilities)
Apr 30	Federal Unemployment Taxes Expense	$                    2,840
	State Unemployment Taxes Expense	$                    3,651
	Social Security Taxes Expense	$                  30,070
	Medicare Taxes Expense	$                    7,033
	Federal Unemployment Taxes Payable		$          2,840
	State Unemployment Taxes Payable		$          3,651
	Social Security Taxes Payable (Employer)		$        30,070
	Medicare Taxes Payable (Employer)		$          7,033
	(Record employer payroll taxes)
Part 2
	Pay		100%
	Social Security		6.20%
	Medicare		1.45%
	Fringe Benefits		25.00%
			132.65%	×   $65,000 =	$                                                      86,222.50
	Federal Unemployment: $9,000 × 0.007 =				$                                                             63.00
	State Unemployment: $9,000 × 0.009 =				$                                                             81.00
					$                                                      86,366.50	Sl