Payroll Problem Example 2006

The Kracker Company has four employees. All are paid on an hourly basis and receive time & a half for all hours worked in excess of 40 per week. A summary of the time worked for the week ended 12/29/A, along with other relevant data is presented below:

Name Ames Baker Cobb Dunn

Hours 20 48 40 44

Regular Hrly. Rate 8.00 12.00 10.00 8.00

FWT 9.40 92.80 64.30 40.15

SWT 3.60 17.20 14.70 16.70

Health Insurance 12.00 9.00 9.00 12.00

Cumulative Earnings Other 12/22/A $45,000.00 10.00 94,100.00 20.00 95,000.00 6,800.00

The "other" deduction from Baker & Cobb is for charitable contributions to the United Way. Baker & Cobb work in the office, and Ames & Dunn are salespeople. Tax Rates & limits are as follows: FICA (employer & employee) Medicare (employer & employee) NYS Unemployment (SUI) (employer) Federal Unemployment (FUI) (employer)

Earnings Rate Limit 6.20% $94,200.00 1.45% 4.50% 8,500.00 0.80% 7,000.00

Required: A) Complete the payroll register for the week ended 12/29/A. B) Journalize the entry to record the payroll. C) Journalize the entry to record the employer's liabilities for payroll taxes.