Question

The form below shows the amounts that appear in the Earnings to Date column of the employees' earnings records for 10 full- and part-time workers in Unger Company. These amounts represent the cumulative earnings for each worker as of October 4, the company's last payday. The form also gives the gross amount of earnings to be paid each worker on the next payday, October 11.

In the state where Unger Company is located, the tax rates and bases are as follows:

Tax on Employees:
	FICA—OASDI	6.2% on first $132,900
	FICA—HI	1.45% on total earnings
	SUTA	0.5% on first $8,000
Tax on Employer:
	FICA—OASDI	6.2% on first $132,900
	FICA—HI	1.45% on total earnings
	FUTA	0.6% on first $7,000
	SUTA	1.8% on first $8,000

In the appropriate columns of the form shown below, do the following:

1.   Compute the amount to be withheld from each employee's earnings on October 11 for (a) FICA—OASDI, (b) FICA—HI, and (c) SUTA, and determine the total employee taxes.
2.   Record the portion of each employee's earnings that is taxable under FICA, FUTA, and SUTA, and calculate the total employer's payroll taxes on the October 11 payroll.

If an amount box does not require an entry, leave it blank. If required, round your answers to the nearest cent. Enter the tax rates as decimals, carried out to four decimal places when required.

UNGER COMPANY
		Gross		Taxes to Be Withheld from Employees' Earnings Under				Employer Taxes: Portion of Employees' Earnings Taxable Under
	Earnings to	Earnings		FICA				FICA
Employee	Date	Oct. 11		OASDI	HI	SUTA		OASDI	HI	FUTA	SUTA
1. Weiser, Robert A.	$138,500	$1,790		$	$	$		$	$	$	$
2. Stankard, Laurie C.	14,950	295
3. Grow, Joan L.	4,060	240
4. Rowe, Paul C.	8,190	235
5. McNamara, Joyce M.	7,460	195
6. O'Connor, Roger T.	132,610	1,810
7. Carson, Ronald B.	8,905	280
8. Kenny, Ginni C.	4,325	175
9. Devery, Virginia S.	57,010	590
10. Wilson, Joe W.	3,615	205
Total employee taxes				$	$	$
Total taxable earnings								$	$	$	$
Applicable tax rate (enter as decimals, not percentages)
Totals								$	$	$	$
Total payroll taxes								$

Answer 1

Employees Payroll Consists of

1. FICA ( Federal Insurance Contributions Act ) Which is divided into Two Cmponents.

a) OASDI (Old Age Survivors, nd disability Insurance) - 6.2% on first $132, 900

b) HI (Health Insurance), SUTA (State Unemployment Tax) - 1.45% on total earnings

2. SUTA (State Unemployment Tax Act) - 0.45% on first $ 8000

Employers has to pay the following components

1.FICA (Federal Insurance Contributions Act)

a) OASDI - 6.2% on first $132, 900

b) HI - 1.45% on total earnings

2. FUTA - 0.6% on first $ 7,000

3. SUTA (State Unemployment Tax Act) - 1.8% on first $ 8000

UNGER COMPANY
Number	Employee	Earnings to Date	Gross earnings Oct.11	Taxes to be witheld from Employees Earnings under	Employer Taxes : Portion of Employees Earnings Taxable Under
FICA	SUTA(0.5% on first $ 8000)	FICA	FUTA(0.6% on first $ 7,000	SUTA(1.8 % on first $ 8000)
OASDI (6.2 % on first $ 132,900)	HI (1.45% on total earnings)	OASDI (6.2 % on first $ 132,900)	HI (1.45% on total earnings)
1	Weeiser, Robert A.	138,500	1,790		25.955			25.955
2	Stankard, Laurie C	14,950	295	18.29	4.2775		18.29	4.2775
3	Grow, Joan L.	4,060	240	14.88	3.48	1.2	14.88	3.48	14.4	4.32
4	Rowe, Paul C.	8,190	235	14.57	3.4075	0.225	14.57	3.4075		0.81
5	McNamara, Joyce M	7,460	195	12.09	2.8275	0.975	12.09	2.8275		3.51
6	Oçonnor, Roger T	132,610	1,810	112.22	26.245		112.22	26.245
7	Carson, Ronald B.	8,905	280	17.36	4.06		17.36	4.06
8	Kenny, Ginni C.	4,325	175	10.85	2.5375	0.875	10.85	2.5375	1.05	3.15
9	Devery, Virginia S.	57,010	590	36.58	8.555		36.58	8.555
10	Wilson, Joe W.	3,615	205	12.71	2.9725	1.025	12.71	2.9725	1.23	3.69
		379,625	5,815	249.55	84.3175	4.3	249.55	84.3175	16.68	15.48

NOTE: For Rowe, Paul C the calculation is as follows:

Employees SUTA = 8190-235=7955. 8000-7955=45 45*0.5% = 0.225

Employers SUTA = 45*1.8%=0.81

1) Total Taxes to be witheld from employees

FICA - OSDI = 249.55

FICA - HI = 84.3175

SUTA. = 4.3

Total. = 338.1675

Total Taxes to be witheld from employees = 249.55 + 84.3175 + 4.3 = 338.1675

2) Employees Taxes = 249.55 + 84.3175 + 16.68 + 15.48 = 366.0275

Total Employers Payroll Taxes = $ 704.195