Question

1. Wage and Tax Statement Data on Employer Federal Insurance Contributions Act tax used to finance federal programs for old-age and disability benefits (social security) and health insurance for the aged (Medicare).FICA Tax

   Ehrlich Co. began business on January 2, 20Y8. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal income tax were withheld in the required amounts. An employee who is hired in the middle of the month receives half the monthly salary for that month. All required The total amount paid to employees for a certain period.payroll tax reports were filed, and the correct amount of payroll taxes was remitted by the company for the calendar year. Early in 20Y9, before the Wage and Tax Statements (Form W-2) could be prepared for distribution to employees and for filing with the Social Security Administration, the A detailed record of each employee's earnings.employees' earnings records were inadvertently destroyed.

   None of the employees resigned or were discharged during the year, and there were no changes in salary rates. The social security tax was withheld at the rate of 6.0% and Medicare tax at the rate of 1.5%. Data on dates of employment, salary rates, and employees’ income taxes withheld, which are summarized as follows, were obtained from personnel records and payroll records:

   Employee	Date First Employed	Monthly Salary		Monthly Income Tax Withheld
   Arnett	Jan. 2	$3,900		$546
   Cruz	Oct. 1	5,900		1,062
   Edwards	Apr. 16	2,200		275
   Harvin	Nov. 1	2,200		275
   Nicks	Jan. 16	5,800		1,305
   Shiancoe	Dec. 1	3,900		605
   Ward	Feb. 1	6,500		1,398

   Required:

   1. Calculate the amounts to be reported on each employee's Wage and Tax Statement (Form W-2) for 20Y8.

   Note: Round amounts to the nearest whole dollar and enter all amounts as positive values.

   Employee	Gross Earnings		Federal Income Tax Withheld		Social Security Tax Withheld		Medicare Tax Withheld
   Arnett	$		$		$		$
   Cruz
   Edwards
   Harvin
   Nicks
   Shiancoe
   Ward
   					$		$

   2. Calculate the following employer payroll taxes for the year: (a) social security; (b) Medicare; (c) state unemployment compensation at 5.4% on the first $10,000 of each employee’s earnings; (d) federal unemployment compensation at 0.6% on the first $10,000 of each employee’s earnings; (e) total.

   Note: Round amounts to the nearest whole dollar and enter all amounts as positive values.

   (a)	$
   (b)
   (c)
   (d)
   (e)	$

Answer 1

Employee	Monthly Salary	Monthly Income Tax Withheld	Months	Gross Earnings	Federal Income Tax Withheld	Social Security Tax Withheld	Medicare Tax Withheld
								Arnett	$ 3,900	$ 546	12	$ 46,800	$ 6,552	$ 2,808	$ 702.0
Cruz	5,900	1,062	3	$ 17,700	$ 3,186	$ 1,062	$ 265.5
Edwards	2,200	275	8.5	$ 18,700	$ 2,338	$ 1,122	$ 280.5
Harvin	2,200	275	2	$ 4,400	$ 550	$ 264	$ 66.0
Nicks	5,800	1,305	11.5	$ 66,700	$ 15,008	$ 4,002	$ 1,000.5
Shiancoe	3,900	605	1	$ 3,900	$ 605	$ 234	$ 58.5
Ward	6,500	1,398	11	$ 71,500	$ 15,378	$ 4,290	$ 1,072.5
Total				$ 229,700	$ 43,616	$ 13,782	$ 3,446
Social Security Tax Withheld			$ 13,782
Medicare Tax Withheld			$   3,446
State unemployment compensation			$   3,148
(5*10000+4400+3900)*5.4%
Federal unemployment compensation			$      350
(5*10000+4400+3900)*0.6%
Total			$ 20,726