Question

The following data for Throwback Industries Inc. relate to the payroll for the week ended December 9.

Employee	Hours Worked	Hourly Rate	Weekly Salary	Federal Income Tax	U.S. Savings Bonds
Aaron	46	$68		$750.20	$130
Cobb	41	62		537.68	140
Clemente	48	70		836.44	150
DiMaggio	35	56		366.04	0
Griffey, Jr.	45	62		641.84	160
Mantle			$1,800	342.45	150
Robinson	36	54		382.56	160
Williams			2,000	398.24	155
Vaughn	42	62		584.72	80

Employees Mantle and Williams are office staff, and all of the other employees are sales personnel. All sales personnel are paid 1½ times the regular rate for all hours in excess of 40 hours per week. The social security tax rate is 6.0%, and Medicare tax is 1.5% of each employee’s annual earnings. The next payroll check to be used is No. 901.

	Required:
1.	Prepare a payroll summary for Throwback Industries Inc. for the week ended December 9. Assume the normal working hours in a week are 40 hours. Enter amounts as positive numbers and round your intermediate calculations and final answers to the nearest whole cent (two decimal places).
2.	Journalize the entry to record the payroll for the week. If required, round your answers to two decimal places. Refer to the Chart of Accounts for exact wording of account titles.

Chart of Accounts

CHART OF ACCOUNTS
Throwback Industries
General Ledger
ASSETS 110 Cash 111 Accounts Receivable 112 Interest Receivable 113 Notes Receivable 115 Inventory 116 Supplies 118 Prepaid Insurance 120 Land 123 Building 124 Accumulated Depreciation-Building 125 Office Equipment 126 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 213 Interest Payable 214 Notes Payable 215 Salaries Payable 216 Social Security Tax Payable 217 Medicare Tax Payable 218 Employees Federal Income Tax Payable 221 Bond Deductions Payable 224 Federal Unemployment Tax Payable 225 State Unemployment Tax Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 Income Summary	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 520 Office Salaries Expense 521 Sales Salaries Expense 524 Depreciation Expense-Building 525 Delivery Expense 526 Repairs Expense 529 Selling Expenses 531 Rent Expense 532 Depreciation Expense-Office Equipment 533 Insurance Expense 534 Supplies Expense 535 Payroll Tax Expense 538 Cash Short and Over 539 Product Warranty Expense 540 Miscellaneous Expense 710 Interest Expense

Answer 1

ployee - Sales Personnel	Hours Worked	Hourly Rate (40 hours and Below)	Overtime Rate over 40 hours (1.5X hourly rate)	Regular Earnings [Actual hrs worked or 40 hrs, whichever is lower] X hourly rate	Overtime Earnings [ Hrs worked in excess of 40 hrs*overtime rate]	Weekly Salary [Regular Earnings + Overtime Earnings]	Federal Income Tax	Social Security Tax (6% of Weekly Salary)	Medicare Tax (1.5% of Weekly Salary)	U.S. Savings Bonds	Total Deductions [Federal Income Tax + Social Security Tax + Medicare Tax + US Saving Bonds]	Paid: Net Pay [Weekly Salary - Total Deductions]
Aaron	46	$68.00	$102.00	$2,720.00	$612.00	$3,332.00	$750.20	$199.92	$49.98	$130.00	$1,130.10	$2,201.90
Cobb	41	$62.00	$93.00	$2,480.00	$93.00	$2,573.00	$537.68	$154.38	$38.60	$140.00	$870.66	$1,702.34
Clemente	48	$70.00	$105.00	$2,800.00	$840.00	$3,640.00	$832.64	$218.40	$54.60	$150.00	$1,255.64	$2,384.36
DiMaggio	35	$56.00	$84.00	$1,960.00	$-	$1,960.00	$366.04	$117.60	$29.40	0	$513.04	$1,446.96
Griffey, Jr.	45	$62.00	$93.00	$2,480.00	$465.00	$2,945.00	$641.84	$176.70	$44.18	$160.00	$1,022.72	$1,922.28
Robinson	36	$54.00	$81.00	$1,944.00	$-	$1,944.00	$382.56	$116.64	$29.16	$160.00	$688.36	$1,255.64
Vaughn	42	$62.00	$93.00	$2,480.00	$186.00	$2,666.00	$584.72	$159.96	$39.99	$80.00	$864.67	$1,801.33
Total				$16,864.00	$2,196.00	$19,060.00	$4,095.68	$1,143.60	$285.91	$820.00	$6,345.19	$12,714.81
Employee - Office Personnel	Weekly Salary	Federal Income Tax	Social Security Tax (6% of Weekly Salary)	Medicare Tax (1.5% of Weekly Salary)	U.S. Savings Bonds	Total Deductions	Paid: Net Pay
Mantle	$1,800.00	$342.45	$108.00	$27.00	$150.00	$627.45	$1,172.55
Williams	$2,000.00	$398.24	$120.00	$30.00	$155.00	$703.24	$1,296.76
Total	$3,800.00	$740.69	$228.00	$57.00	$305.00	$1,330.69	$2,469.31
2. Journalize the entry to record the payroll for the week.
JOURNAL
	DATE	DESCRIPTION				DEBIT	CREDIT
1	Dec. 9	Sales Salaries Expense				$19,060.00
2		Office Salaries Expense				$3,800.00
3		Social Security Tax Payable					$1,371.60
4		Medicare Tax Payable					$342.91
5		Employees Federal Income Tax Payable					$4,836.37
6		Bond Deductions Payable					$1,125.00
7		Salaries Payable					$15,184.12