SP Company has five employees. Employees paid by the hour receive a $10 per hour pay rate for the regular 40-hour work week plus one and one-half times the hourly rate for each overtime 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 $106,800paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.8% 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 percent 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.
Employee
| Cumulative pay (Excludes Current Period) | Current Period Gross Pay | FIT | FUTA | FICA-SS_EE | FICA-Med_EE | EE-Ben_Plan Withholding | Employee Net Pay | ||
Pay Type | Pay Hours | Gross Pay | SIT | SUTA | FICA-SS_ER | FICA-Med_ER | ER-Ben_Plan Withholding | |||
Kathleen | $105,000.00 | Salary |
| $7,000.00 | $2,000.00 |
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| 300.00 |
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| ||
Nichole | 6,800.00 | Salary |
| 500.00 | 80.00 |
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| 20.00 |
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Anthony | 15,000.00 | Regular | 80 |
| 110.00 |
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Overtime | 8 |
| 25.00 |
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Zoey | 6,500.00 | Regular | 80 |
| 100.00 |
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| Overtime | 4 |
| 22.00 |
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Gracie | 5,000.00 | Regular | 74 | 740.00 | 90.00 |
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| Overtime | 0 | 0.00 | 21.00 |
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Totals |
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| 2,380.00 |
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a.Complete this payroll register by filling in all cells for the pay period ended August 31. Hint: See Exhibit 9A.3 for guidance. (Round amounts to cents.)
b.Prepare the August 31 journal entry to record the accrued biweekly payroll and related liabilities for deductions.
c.Prepare the August 31 journal entry to record the employer’s cash payment of the net payroll of part b.
d.Prepare the August 31 journal entry to record the employer’s payroll taxes including the contribution to the benefits plan.
e.Prepare the August 31 journal entry to pay all liabilities (expect net payroll in part c) for this biweekly period.
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