Question

Highridge Homes has the following payroll information for the week ended February 21:

Name	Earnings at End of Previous Week	Daily Time							Pay Rate	Federal Income Tax
		S	M	T	W	T	F	S
Arthur, P.	7,800.00	8	8	8	8	8			45.00	226.78
Bills, D.	2,060.00			8	8	8	8	8	12.50	26.00
Carney, W.	2,085.00	8	8	8			8	8	12.95	27.00
Dorn, J.	748.00				8	8			22.00	11.00
Edgar, L.	2,687.00	8	8	8			8	8	15.00	37.00
Fitzwilson, G.	4,150.00	8	8		8	8	8	8	23.00	125.00

Taxable earnings for Social Security are based on the first $118,500. Taxable earnings for Medicare are based on all earnings. Taxable earnings for federal and state unemployment are based on the first $7,000. Employees are paid time-and-a-half for work in excess of 40 hours per week.

Required:

1. Complete the payroll register. The Social Security tax rate is 6.2 percent, and the Medicare tax rate is 1.45 percent. Begin payroll checks with No. 2080. If required, round your intermediate calculations and the final answers to the nearest cent and use the rounded answers in subsequent computations. If an amount is zero, enter "0".

HIGHRIDGE HOMES

PAYROLL REGISTER FOR WEEK ENDED February 21, 20--

NAME

TOTAL HOURS

BEGINNING CUMULATIVE EARNINGS

EARNINGS

ENDING CUMULATIVE EARNINGS

TAXABLE EARNINGS

DEDUCTIONS

PAYMENTS

REGULAR

OVERTIME

TOTAL

UNEMPLOYMENT

SOCIAL SECURITY

MEDICARE

FEDERAL INCOME TAX

SOCIAL SECURITY TAX

MEDICARE TAX

TOTAL

NET AMOUNT

CK. NO.

Arthur, P.

$

$

$

$

$

$

$

$

$

$

$

$

$

Bills, D.

$

$

$

$

$

$

$

$

$

$

$

$

$

Carney, W.

$

$

$

$

$

$

$

$

$

$

$

$

$

Dorn, J.

$

$

$

$

$

$

$

$

$

$

$

$

$

Edgar, L.

$

$

$

$

$

$

$

$

$

$

$

$

$

Fitzwilson, G.

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

Feedback

The payroll register consists of beginning and ending cumulative earnings, Current earnings, Taxable earnings, and deductions bringing you to the Net Pay amount. Be sure and watch for the maximum amounts on Social Security Taxable income and also Unemployment Taxable income. An example of a payroll register is in your textbook.

2. Prepare a general journal entry to record the payroll. The firm's general ledger contains a Wages Expense account and a Wages Payable account. Then assuming that the firm has transferred funds from its regular bank account to its special payroll bank account and that this entry has been made, prepare a general journal entry to record the payment of wages. When necessary, round your intermediate calculations and the final answers to the nearest cent. If an amount box does not require an entry, leave it blank.

GENERAL JOURNAL					PAGE
DATE	DESCRIPTION		POST. REF.	DEBIT	CREDIT
20--
Feb. 21	Wages Expense
	Employees' Federal Income Tax Payable
	FICA Social Security Tax Payable
	FICA Medicare Tax Payable
	Wages Payable
	Payroll register for week ended February 21.
Feb. 21	Wages Payable
	Cash—Payroll Bank Account
	Paid wages for week ended February 21.

Answer 1

Payroll Register
Employees	Beginning	Gross wages					Ending	Taxable Earnings		Deductions				Net pay
	Cumulative	Hrs.	Hourly Rate	Basic	Overtime	Total	Cumulative	Unemployment	Social Security	Fed IT	Soc. Security	Medicare	Total
Arthur. P.	$7,800	40	$45.00	$1,800.00		$1,800.00	$9,600		$1,800	$226.78	$111.60	$26.10	$364.48	$1,435.52
Bills, D.	$2,060	40	$12.50	$500.00		$500.00	$2,560	$500	$500	$26.00	$31.00	$7.25	$64.25	$435.75
Carney, W.	$2,085	40	$12.95	$518.00		$518.00	$2,603	$518	$518	$27.00	$32.12	$7.51	$66.63	$451.37
Dorn,J.	$748	16	$22.00	$352.00		$352.00	$1,100	$352	$352	$11.00	$21.82	$5.10	$37.93	$314.07
Edgar, L.	$2,687	40	$15.00	$600.00		$600.00	$3,287	$600	$600	$37.00	$37.20	$8.70	$82.90	$517.10
Fitzwilson, G.	$4,150	48	$23.00	$920.00	$276.00	$1,196.00	$5,346	$1,196	$1,196	$125.00	$74.15	$17.34	$216.49	$979.51
										$452.78	$307.89	$72.01	$832.68	$4,133.32

	General Journal
Date	Description	Debit	Credit
21-Feb-19	Wages Expenses	$4,966
	Federal income tax payable		$453
	FICA Social Security tax payable		$308
	FICA Medicare tax payable		$72
	Wages Payable		$4,133
	(To record payroll for the week ended February 21)
21-Feb	Wages payable	$4,133.32
	Cash - Payroll Bank account		$4,133.32
	(to record wages paid for week ended february 21)